Deed or agreement – which one should I use?
Updated: 6 February 2021
Sometimes you will have an option about whether to use a deed or an agreement.
For example, where a lawyer has an option to prepare a non disclosure agreement or confidentiality deed. It can be prepared as a confidentiality deed or as a confidentiality agreement.
A lawyer will know the difference but so should you, especially if you are relying on online templates and don't have a lawyer to guide you.
So, if you had the choice, which should you use - deed or agreement ?
Here are some features of a deed and an agreement side by side to help you decide which is best for you.
You don't need:
You don't need:
Examples of when to use a deed and when to use an agreement
Below are the features that may impact your decision to select either an agreement or deed in a particular situation.
E-signing is important
E-signing is not important
What if you get it wrong ?
If you use an agreement and there was no consideration (no money changing hands) then the agreement may not be enforceable.
But, before you panic about this, get advice.
So, given that there can be some enforceability concerns with an agreement, what's safer?
The safer option
In this way, deeds are a safer option - you don't need to worry about a lack of consideration e.g. discussing a business idea without money changing hands because the deed covers you regardless.
But... as discussed above, you'll need to sign a deed with pen and paper and if you are in Victoria, you'll need a witness.
So, if speed is a factor in getting a document executed, these extra steps could make a deed a hassle for you.
As always, if you are in doubt, get advice.
I wish you success in your ventures!