Execution clauses

Lawyers work on a huge variety of transactions, but all of them will in some way involve written agreements that will need to be executed by the parties. For this reason, it is very important that lawyers know when a deed is required and fully understand the differences in how deeds and simple contracts are executed.

This subtopic summarises the law, guidance and practice relating to simple contracts and deeds, including in particular:

  1. the key elements that must be present to create a contract

  2. what simple contracts are and how they are executed

  3. what a deed is and the particular transactions for which a deed (rather than a simple contract) is required

  4. the formalities for creating valid deeds

  5. guidance on executing deeds and simple contracts in counterpart, and

  6. how to circulate pre-signed counterpart signature pages and virtual closings

The law and practice relating to the execution of simple contracts and deeds under English law is summarised in Practice Note: Executing documents—deeds and simple contracts , as well as the key differences and the execution formalities for each. For more information, see Practice Notes:

  1. Virtual

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Insolvency, declarations of trust, loan agreements, artificial asset protection, sham transactions, transactions defrauding creditors, interspousal asset transfers, change of position defence and wife’s entitlement to share of husband’s assets (Sayers v Dixon)

Restructuring & Insolvency analysis: The court held that six declarations of trust (DoTs) executed by the transferor (Mr Dixon) in favour of his wife (Mrs Dixon) constituted transactions defrauding his creditors within the meaning of section 423 of the Insolvency Act 1986 (IA 1986) and that two of them, purporting to transfer all his future assets and income to Mrs Dixon, along with an accompanying loan agreement, were shams which were void and ineffective. It set aside the DoTs and ordered Mrs Dixon to restore the value of three transferred properties (which had been converted into £551,589 cash) to Mr Dixon’s trustees in bankruptcy (trustees) together with interest of £101,726. It also ordered an account to be taken of the funds that had been transferred to Mrs Dixon or on her behalf by Mr Dixon over the seven years between the date of the DoTs and his bankruptcy. The court dismissed Mrs Dixon’s defence of change of position to the trustees’ claim for restoration, finding that even if such a defence were generally available (which is unclear), she had not acted in good faith and could not rely on it. It also dismissed her defence that, having been married to Mr Dixon for many years, she was entitled to half his assets and/or an entitlement to a share of them by virtue of a right to be maintained. Written by Jonathan Lopian, barrister at New Square Chambers, who acted for the successful claimants.

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