Deed vs Contract UK: Key Differences, Uses & Execution Guide

Key Takeaways

1. The key difference between a deed and a contract in the UK is that a deed does not require consideration, but a contract does.
2. Deeds have stricter legal requirements than contracts, including formal wording, signing, and witnessing, as established in the Law of Property (Miscellaneous Provisions) Act 1989.
3. Using the wrong document type can make agreements unenforceable and lead to lost business or legal disputes.
4. Transactions such as property transfers and granting power of attorney must legally be executed as deeds.
5. A deed provides a longer limitation period—12 years—compared to just 6 years for contracts.
6. An invalidly executed deed, such as one not properly witnessed, cannot be enforced in court.
7. Digital signing of deeds is permitted, but the witnessing and formality rules still apply strictly.
8. Always check statutory requirements and whether consideration is included before choosing between a deed or contract.
9. Go-Legal AI offers step-by-step guides and lawyer-drafted templates to ensure your deeds and contracts comply with UK law.
10. By choosing Go-Legal AI, you gain access to robust, up-to-date legal templates and smart compliance tools rated Excellent on Trustpilot by over 170 users.

What Is the Difference Between a Deed and a Contract in the UK?

Are you uncertain about when your agreement should be a deed rather than a simple contract? Many founders and business owners make costly mistakes by selecting the wrong type of document—putting vital deals, property transfers, and their own legal protections at risk.

A deed does not require consideration, but it must meet specific legal execution standards. In contrast, a contract will only be enforceable if both parties exchange something of value (consideration). Certain high-value or sensitive transactions—such as property transfers or granting power of attorney—are only valid when formalised as deeds. Using the correct document type is essential for legal enforceability and dispute avoidance.

In this guide, you’ll learn the differences between deeds and contracts in England and Wales: when each is required by law, essential steps for valid execution, practical advice for digital signing, and how to avoid the pitfalls that can invalidate your agreement. With Go-Legal AI, you can access smart templates, digital checklists, and review tools—letting you create or verify your documents with confidence.

What Is the Legal Difference Between a Deed and a Contract in the UK?

The primary legal difference is how each document becomes binding and enforceable.

A contract (or “contract under hand”) must involve consideration—something of value exchanged between the parties, like money, services, or goods. If there is no consideration, the contract is almost always unenforceable.

A deed does not require any consideration. Instead, its strength comes from formal legal requirements: the document must state it is “executed as a deed”, be signed in the presence of an independent adult witness, and be formally “delivered” (which usually means signed and intended to take effect). Even a promise that benefits only one party can be made legally binding by deed.

When Do You Need a Deed Instead of a Contract in England and Wales?

Some transactions must be formalised as a deed under UK law. Knowing when this applies protects your business and personal interests.

Deed Required in These Scenarios:

• Transfer of property or land
  Law of Property (Miscellaneous Provisions) Act 1989 s.1; Law of Property Act 1925 s.52
  Every legal transfer of land or property must be made by deed.
• Most leases over three years
  LP(MP)A 1989 s.1
  Leases exceeding three years require execution as deeds.
• Granting a mortgage or legal charge
  Land Registration Act 2002 s.27
  All legal mortgages and charges over registered land must be by deed.
• Powers of Attorney
  Powers of Attorney Act 1971 s.1
  Only effective when executed as a deed.
• Certain company documents
  Companies Act 2006 ss.44 & 46
  E.g., deeds of guarantee or release, where statute or articles require a deed.
• Deeds of gift, guarantee, or release
  Typically when only one party is providing value, or no consideration passes.

Key Legal Differences: Deed vs Contract (Consideration, Limitation, Statutory Requirements)

What Are the Legal Requirements for Executing a Deed vs a Contract in the UK?

Ensuring the correct execution of your document is vital—mistakes here often make contracts or deeds unenforceable.

Executing a Contract (Simple Contract/Contract Under Hand)

1. Agree on all terms between the parties.
2. Each party signs (can be typed, digital, or handwritten).
3. Witnessing is typically not required unless specifically demanded.
4. Date the contract for clear reference.

Executing a Deed

1. The document must state it is “executed as a deed”.
2. Each party signs in the presence of an independent adult witness.
3. The witness adds their full name, address, and signature.
4. The deed is “delivered” (usually by signing, or as specified in the document).

Who can witness a deed?

• The witness must be independent (over 18, not a party to the deed, ideally not a close family member).
• For company deeds, follow the Companies Act 2006 s.44—either two directors, a director and secretary, or one director with independent witness.

What Does “Contract Under Hand” Mean Compared to a Deed?

A “contract under hand” is a routine written contract. It is signed by the parties—no witness needed—and it must clearly record what each side is giving or gaining (consideration).

A deed requires careful wording, witnessing, and delivery, but does not need consideration. Use it whenever one party is not exchanging value or you need added legal certainty.

Essential Clauses and Checklist: What to Include in a Deed vs a Contract

How to Execute a Deed or a Contract Step-by-Step (Individuals, Companies, LLPs)

For Individuals

Contract (Under Hand)

1. Both parties confirm all contract details.
2. Each signs and dates the contract—no witness usually required.

Deed

1. Include “executed as a deed” wording.
2. Sign in front of an independent adult witness.
3. The witness signs, printing their name and address.
4. Include a clause confirming delivery as a deed.

For Companies (Companies Act 2006 s.44)

Contract

1. Signed by a director, company secretary, or other authorised person.

Deed

1. State “executed as a deed by [Company Name]”.
2. Have either two directors, a director and company secretary, or a director plus an independent witness sign.
3. Include date and confirm deed delivery in the wording.

For LLPs

Deed

1. Either two members sign, or one member with an independent witness.
2. Add date and confirm delivery.

Can You Sign a Deed Electronically in the UK? (Witnessing & E-signature Rules Explained)

Electronic signatures are legally accepted for both contracts and deeds—provided the correct witnessing rules are followed.

• Simple contracts: Can be signed electronically using approved e-signature systems, which record intent and identity.
• Deeds: Signing can be electronic, but the witness must be in the same physical location, observing the signature before signing themselves. Video witnessing is not legally valid except in rare, regulated cases. Use an e-sign solution that creates a clear audit trail.

What Happens if You Use the Wrong Document Type or Get the Execution Wrong?

Using an incorrect document or mishandling execution can void your agreement entirely:

• Deed required but contract used: Your agreement may have no legal force, risking failed property or asset transfers.
• Improperly executed deed: If signed by a party’s family member, missing wording, or unsigned by the witness, the deed is likely unenforceable, leaving all parties exposed.
• Contract with missing or invalid signatures: Legal rights may be lost, or you may have no claim in court.

Real World Scenarios: When Is a Deed Mandatory? (Property, Loans, Power of Attorney, and More)

Common transactions requiring deeds under UK law:

• Transferring land or property: Deeds are always required for legal title.
• Leases of more than 3 years: Must be created by deed for full legal protection.
• Granting a mortgage or legal charge: Only effective as a deed.
• Powers of attorney: Statutory requirement for deed execution.
• Deeds of gift, guarantee, IP assignments: Essential for one-sided promises and registrable assignments.

Decision Checklist: Do I Need a Deed or a Contract for My UK Transaction?

Ask these questions before preparing your legal document:

• Is any value (consideration) exchanged?
  – No: You need a deed.
• Are you transferring land, registering intellectual property, or granting powers?
  – Yes: Use a deed.
• Must your agreement be enforceable after 6+ years?
  – Yes: A deed gives longer protection.
• Is speed and minimal formality important, and both parties give value?
  – Yes: A contract is likely sufficient.
• Is there a statutory requirement for a deed?
  – Yes: Only a deed will be legally valid.

When you’re not sure, use our interactive Deed vs Contract Decision Tool to assess your exact situation step by step.

Frequently Asked Questions

What is a limitation period and how does it differ for a deed vs contract?

A limitation period is the timeframe in which you can bring a legal claim. For most contracts, this is six years from the date of breach or cause of action. For deeds, you have up to twelve years, providing extended protection.

Who can act as a witness when signing a deed in England and Wales?

A witness must be an independent adult over 18 years old who is not a party to the deed. It’s best practice for the witness to have no close family relationship with the signing party.

Can I use a simple contract instead of a deed for property transactions?

No. To be legally valid under UK law, transfers of property or land must be executed as deeds.

What happens if a deed is not properly witnessed?

If a deed is incorrectly witnessed, it is usually rendered invalid and unenforceable, risking the entire transaction.

How do I deliver a deed and what does “delivered as a deed” mean?

Delivery generally means the parties intend to be legally bound by the deed—this is usually at the moment of signature, but can be scheduled in the document.

Are there risks with electronic signatures on deeds in the UK?

The main risk is that the witness must be physically present at the act of signature; remote or video witnessing is not legally valid except in rare cases.

What is consideration, and why doesn’t a deed require it?

Consideration is the value exchanged between parties, which is required for contracts. Deeds do not require consideration; their enforceability relies on formal execution.

Can a company execute a deed without using a seal?

Yes. Under the Companies Act 2006, companies rarely need a common seal and may execute deeds by director signature with or without a secretary or witness.

Is a deed legally stronger or more difficult to challenge than a contract?

Deeds enjoy a longer limitation period and, due to formal execution requirements, are more robust and more difficult to challenge in court than simple contracts.

Are templates safe to use for deed or contract drafting?

Templates are safe if they are kept up to date, reviewed for compliance, and adapted to your circumstances. Our lawyer-drafted templates are designed for UK business needs and legal standards.

Choose the Right Deed or Contract with Go-Legal AI

Understanding the differences between deeds and contracts is vital for protecting your deals and ensuring your documents are legally enforceable. Poor drafting or execution errors can cost you major business opportunities, from failed property transfers to the loss of key intellectual property.

Our platform empowers you to instantly determine whether you need a deed or contract and generates compliant documents tailored to UK law. With access to current, expertly drafted templates and digital tools, you can reduce risk and act confidently in all your business transactions.

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