The proper execution of legal documents is a cornerstone of enforceable business and personal transactions in Australia. Whether you are signing a contract, deed, or property transfer, understanding who is authorised to sign and the required formalities can mean the difference between a binding agreement and an unenforceable document.
This comprehensive guide, prepared by our contract law team, breaks down the essentials of execution clauses for individuals and corporations, highlights common pitfalls, and answers frequently asked questions to help you avoid legal complications.
Key Takeaways
- Proper execution is critical for enforceability of deeds, agreements, and property documents in Australia
- Deeds have stricter signing and witnessing requirements than simple agreements
- Companies can execute documents under specific provisions of the Corporations Act 2001 (Cth)
- Electronic signatures are generally valid, but some exceptions apply
- Improperly executed documents risk unenforceability, loss of statutory protections, and personal liability
Understanding Execution Clauses: Individuals vs Corporations
Execution by Individuals
For most agreements, an individual’s signature is sufficient unless the contract specifies otherwise.
However, deeds require stricter compliance. For example, in New South Wales, a deed must be signed and witnessed by an adult who is not a party to the deed (Conveyancing Act 1919 (NSW), s 38)
Simple agreements do not generally require witnessing unless contractually specified. For example, for land dealings, only a qualified witness (such as a legal practitioner or licensed conveyancer) can attest signatures (Real Property Act 1900 (NSW), s 117)
If you’re entering into a lease agreement and need guidance on execution or negotiation, speak with a commercial lease lawyer from Prosper Law today.
Execution by Corporations
Australian companies may execute documents in two main ways under the Corporations Act 2001 (Cth):
Section 127 – Statutory Method
Section 127: The formal statutory method allowing documents (including deeds) to be executed by:
- Two directors
- A director and a company secretary
- The sole director if the company only has one director
This method gives rise to statutory assumptions under s 129, protecting third parties who rely on the document’s validity.
Section 126 – Execution by Agent
Section 126: Allows execution by an agent of a company with express or implied authority (Such as en employee or lawyer). This method does not require compliance with s 127 formalities and can include electronic signing.
Electronic Execution in Australia
Electronic signatures are legally recognised for most documents under both the Corporations Act 2001 (Cth) (sections 110A and 127(3B)) and the Electronic Transactions Act 1999 (Cth).
When Are E-Signatures Valid?
E-signatures are valid for most agreements and company documents unless specifically excluded by law. To be legally effective, the method used must:
- Clearly identify the person signing
- Indicate their intention to be legally bound
- Be consented to by all parties involved
- Be reliable and appropriate for the purpose
Key Exceptions
Some types of documents still require physical (wet ink) signatures or qualified witnessing, including:
- Certain deeds, especially those signed by individuals
- Land dealings or property transfers, where original signatures and prescribed witnesses are often required by law
Always check whether the type of document you’re signing has special rules or exclusions under state or federal law.
Did you know? We can do electronic independent solicitors certificates (if your lender permits e-signing).
Deeds vs Agreements: What’s the Difference?
Feature | Deeds | Agreements |
Consideration required | No | Yes |
Witness required | Yes (for individuals) | Usually no |
Limitation period (NSW) | 12 years | 6 years |
Delivery required | Yes | No |
Written form | Yes | Yes/No (varies) |
Deeds: Must show clear intent, be in writing, signed, witnessed (if individual), and delivered. No consideration is needed. Longer limitation period for enforcement (12 years in NSW)
Agreements: Require offer, acceptance, intention, and consideration. May be oral or written except where writing is required (e.g., land contracts)
Qualified Witnesses: Who Can Witness Your Signature?
Witnesses to a deed must be:
- Any adult not a party to the deed may witness most deeds
For property transactions in NSW only, witnesses must be either:
- Legal practitioners
- Licensed conveyancers
- Other prescribed persons
Important: Witnesses must be impartial; beneficiaries or parties to the transaction cannot act as witnesses.
Consequences of Improper Execution
Legal Risks and Pitfalls
Improperly executed documents can have serious legal consequences:
- Unenforceability – Deeds not properly witnessed or delivered may be void or treated as simple agreements, risking unenforceability
- Shorter Limitation Periods – Claims may fall under shorter contractual limitation periods if the deed is invalid
- Loss of Statutory Assumptions – Failure to comply with s 127 prevents reliance on statutory assumptions under s 129
- Invalid Property Dealings – Non-compliant title documents may be incapable of registration or void at law
- Inadmissibility as Evidence – Courts may exclude improperly executed documents in property disputes
- No Waiver of Formalities – Courts generally do not waive statutory requirements for deeds (Sigma Credit Pty Ltd v Philmont Credit Ltd (1997) 29 ACSR 1)
- Director or Agent Liability – Signing outside actual authority may result in personal liability for breach of warranty of authority
- Misleading Conduct – Passing off an invalid document as enforceable may breach s 18 of the Australian Consumer Law
Case Study: When Improper Execution Goes Wrong
A company director signs a deed on behalf of the company but does not have a second director or company secretary co-sign as required by s 127 of the Corporations Act 2001 (Cth). When a dispute arises, the counterparty cannot rely on statutory assumptions of due execution under s 129, leading to costly litigation over the validity of the deed and potential unenforceability.
If you need assistance with drafting or executing legal documents in Australia, contact our experienced team today to ensure your agreements are valid and enforceable.
Frequently Asked Questions
Who can sign a deed in Australia?
Individuals can sign their own deeds but require a witness who is not a party to the deed
Companies can sign via two directors, a director and secretary, or the sole director (if applicable), or through an authorised agent
Are electronic signatures valid for deeds and agreements?
Generally yes for most agreements and company deeds, provided identification and intent are clear
Some land dealings and specific deeds may require original signatures or prescribed witnessing
What happens if a deed is not properly witnessed?
The deed may be unenforceable or treated as a simple contract with a shorter limitation period
Can a party to a transaction act as a witness?
No, witnesses must be impartial and not a party or beneficiary to the transaction
What is the difference between executing under s 126 and s 127 of the Corporations Act?
Section 127 provides statutory protections and formal requirements for company execution
Section 126 allows execution by an authorised agent without strict formalities but lacks statutory assumptions for third parties
