With the country now in lockdown due to the COVID-19 pandemic, a fair number of people are working from home in isolation. Although many are trying to continue business as usual, social distancing has its challenges: not least the signing of documents remotely.
Deeds are particularly problematic due to the requirement for another person to witness the signatory executing the deed, and the current law is not clear on whether or not a person witnessing the signature via videocall will invalidate the deed. If you are being asked to sign a deed, it is worth understanding whether or not the document actually needs to be a deed.
Certain transactions or documents are required by law to be cast as a deed. These include mortgages and charges, transfers or land or interests in land, certain leases, and powers of attorney.
However, most deeds are often drafted as deeds simply because there is no consideration given. Consideration - along with an intention to create a binding agreement that is supplemented by an offer which is accepted - is one of the fundamental requirements for a contract to be valid and enforcement. Consideration does not have to be financial - if each of the parties has obligations under the contract, that will be acceptable. However, past consideration will not suffice, so a variation to a contract already agreed or a supplemental agreement may not contain, in its own terms, valuable consideration.
Consideration doesn't need to be adequate, though. The parties can decide between themselves what consideration they want; in the past, a peppercorn was considered to provide adequate nominal consideration, and would still be valid today. The more usual modern equivalent, though, is usually the sum of one pound.
It is always worth checking with your legal advisers why a document you are being asked to sign is a deed. This may not be obvious; it may be, for example, that a longer liability limitation period is required - "simple" contracts (those signed by one signatory for each party) have a limitation period of six years; deeds have a limitation period of 12 years. If the only reason the document is prepared as a deed is due to the lack of consideration, adding a nominal consideration clause similar to one set one below will allow the document to be amended such that only one signatory is required. This allows authorised signatories to continue to sign documents remotely without breaching Government lockdown rules.
"The parties agree to comply with the terms of this agreement in consideration of the payment by each party to the other of the sum of one pound (£1.00), the receipt and sufficiency of which is acknowledged by each party"