Commercial contracts in contrast
A commercial contract may be a deed, or an agreement. The main difference between an agreement and a deed is that an agreement must have consideration (some form of payment) moving from one party to the other party – for example, I will transfer ownership of this house to you in return for payment of $2,500,000.00.
By contrast a deed does not have to have an exchange of promises or consideration moving from one party to the other – for example, I will hold 2,000 shares in Amaysim Australia Ltd in trust for you.
A commercial contract that is not a deed does not need to (but should!!!) be in writing, unless the law requires it, such as, with real property transactions.
A deed on the other hand must be in writing and formally executed using the magic words “Signed, Sealed and Delivered by ABC in the presence of DEF”. The distinction between a commercial contract which is an agreement, and a deed bites when one party seeks to enforce the commercial contract or the deed.
Under the Limitations Act 2005 (WA) an enforcing party has 6 years from the date that the cause of action accrues to enforce an agreement, and 12 years to try to enforce a deed.
How can KLD Legal help? We can:
- Draft commercial contracts.
- Review commercial contracts and provide advice on the meaning and effect of the contract terms and whether they should agree to certain terms or whether the terms are even enforceable at law.
- Advise on and provide representation in commercial contracts disputes. Informing clients of their legal position under the contract; how they can seek to enforce their contract rights and or bring the contract to an end and seek damages from the other party.