Deed: Introduction and its Components

Introduction:

A deed (formerly ‘proof’) is, in English Law, any legal document in paper that transfers, affirms, or supports a claim, privilege, or asset and is signed, assented, presented, and in some countries, sealed. Transferring (conveyancing) title to a property is generally related to it. It has a higher assumption of validity than the instrument agreed to sign by the party involved in it & is less refutable. The deed can be unilateral or bilateral. It consists of conveyances, commissions, licenses, patents, diplomas, and if executed like this, conditional attorney powers. It is considered to be an advanced descendant of the ancient charter, and the ancient livery of seisin[1] is thought to substitute delivery.

The conventional term signed, sealed, and supplied pertains to the exercise of seals; but to some extent, objecting witnesses have substituted seals. Arrangements under seal are often termed contracts by deed or specialty; in the United States, a specialty is binding without consideration. In some counties, specialties have a limitation period of liability of twice the limitation period of a simple contract and enable an undertaking to be enacted by a 3rd party recipient in the act, thereby eliminating the privacy doctrine. Specialties are bilateral as a type of contract and therefore can be differentiated from covenants, which are unilateral promises and are also under seal.

Requirements

In common law, the following things must be present to be called a deed:

1. It must claim, prima facie, that it’s a deed, using words such as “This Deed…” or “executed as a deed”
2. It should mean that any right or thing to someone is expressed by the instrument itself.
3. The grantor should be in his/her legal capacity to grant the item or privilege and must have the legal capacity to procure it from the grantor[2].
4. In the presence of the specified number of witnesses, identified as instrumental witnesses, it must be executed.
5. A seal may be attached to it in some authorities. Initially, attaching seals made it optional for people involved in the deed and signatures, but they are still obsolete in most authorities, so the grantor and witness signatures are primary.
6. It must be delivered to (supplied) and approved by the grantee in some jurisdictions (acceptance).

Components of a Deed

A deed includes different paragraphs, each of which deals with particular facts or knowledge in a detailed language. A deed’s main components are:

1. Heading of the document: The title of the said deed should be written here.
2. Description of the deed title: “The explanation of the title of the deed, which begins with the name of the deed and thus the deed, must contain the precise title, i.e. “This Partnership Deed” or “This Sale Deed. Also, these words must be written in capital letters. These words have been copied from the English forms of conveyancing by the lawyers of India.
3. Date and place of the execution: The execution date is written after the description as “This Sale deed is being made…..”, which is important in a paper, for the validity of the statute, maturity period, registration, and the transfer of title, etc. The deed comes into effect on its execution effect as per the Indian Registration Act. If two different dates are used, then the latter shall be considered.
4. Name and description of the parties involved: This is the most important part and no deed is complete without this. The document should contain names and details like age, address, etc. of all the parties and inter parties concerned. Details of the transferor shall be given before the transferee’s details when describing the parties. And if a confirming party exists, his/her details should be given after the transferor’s details. This instrument will not be applicable to the person whose name is not on it and hence this will be considered an invalid deed. Which party is necessary depends on the circumstances. There is usually a lesser and a lessee. A corporation or a company can also become a party.
5. Recitals: These should be given value and an agreement’s recital in a deed is as important as a deed’s agreement. They are generally divided into two. Narrative recitals are those that explain the facts about the deed and introductory recitals are those that explain the aim behind the operative fragment. It contains the accurate history of the property to the extent that the transfers are granted. The recital is simple, short, and to the point. Usually, it is considered as proof against the involved parties and the parties that are claiming under it. In case of any action against the deed, this is considered as an estoppel, Excerpt on a collateral matter.[3] Under this head, a chronological order of facts are given. When it comes to narrative recitals, this chronological order has to be followed stringently. The same is the case with introductory recitals. They start with the word “whereas”.
6. Testatum: Testatum is a witness clause. The operative part of a deed begins with it and is a witness clause, starting with the words “Now this deed witnesses”. If the deed is intended for many purposes, it is written as “Now this deed witnesses” as follows:
   It is the start of the operational part of a deed.
7. Consideration: It is an act or abstention or the assurance of it that one of the parties proposes to an arrangement and recognizes it as an induction to a promise or action of the other.
   The legal duty is based on valuable consideration. It may be money or assets, or it may be doing something or forbearance.
   An adequate account means an equal or other useful gain transferred to a Promising Party or the transferor to the Transfer Party by the Promisee. 
8. Receipt: A written acknowledgment or an appreciation that may be included in the deed itself. Receipt contains any notes, memorandum, or written notice (a) if any money or bill of exchange or promissory notice is recognized, (b) if any movable property was approved, etc.
9. Operative words: This is a very critical aspect of a deed that differs with the nature of the property and the transaction. It is the section that expresses the impact of the deed as differentiated from recitals, form, premises, and so on.
10. Parcel/ Description of the property: In the paper, submitted for registration, the property must be fully defined in compliance with the Registration Act. A full property description is also valuable because it makes identification of the property in government documents easier and makes it easier to verify if it is free.
11. General words: The position of general words after the parcel that gives specifics of the case and legal occurrences.
12. Terms and Conditions: As the name indicates, the terms and conditions define rules, standards, criteria, and so on.
13. Exceptions and Reservations: This means that the transferor should introduce clear rights over the property that the transferor negotiated upon.
14. Habendum: The term “to have and to hold” begins in this clause. The descriptions of the various properties transferred are accompanied by these terms.
15. Testimonium: This is the last part of the act that shows the fact that the parties have signed the deed.
16. Covenants and Undertakings: It refers to the underlying agreement, in which the parties involved guarantee the validity of the truth. The text reads as “the above-mentioned parties hereby consent mutually:”
17. Signature of the parties and the witness: The parties and their witnesses must be signed after certification.
18. Annexure or Schedule: A deed is considered incomplete, except in compliance with the schedule to be annexed to the deed, where the specifics needed by the law on land or property are given.
19. Stamp Duty: A stamping paper with a specified value is mandatory to carry out the deed.

Conclusion

In this article, the meaning, introduction, requirements, and components of a deed were discussed. All these things explain why deed has become so important in today’s world. Usually, people get confused between a deed and an agreement. The key difference between a deed and an agreement is that only one person/party signs the deed usually. Examples of a deed are mortgage deeds to charge mobile properties for banks/financial institutions, etc. An agreement under its name indicates that it should be signed/approved by at least two parties. Examples of a contract include a sales deal, a loan deal, etc.

References:

[1] O’Connor, E. Rory (1987). The Irish Notary. Dublin: Professional Books. p. 83

[2] A grant, in law, is a transfer of property, generally from a person or other entity giving the property (the grantor) to a person or entity receiving the property (the grantee).

[3] Ram Charan Das V. Girja Nandini Devi AIR 1966SC 323.