Drafting of Deeds CA. Nirmal Ghorawat B. Com(Hons), ACA
What is a DEED? is Written Instrument it Contains a Contract is Signed and Delivered by the parties
Generally, used for Conveyance of Title in Real Property.
Basic Principles of Drafting CLEAR CONSCISE CONSISTENCY COHERENT ARRANGEMENT
Components of a DEED TITLE DATE OF EXECUTION PLACE OF EXECUTION DESCRIPTION OF PARTIES RECITALS TESTATUM COVENANTS OR TERMS & CONDITIONS TESTIMONIUM ATTESTATION ANNEXURES &/OR SCHEDULES ENDORSEMENTS SUPPLEMENTARY DEED
1. TITLE DEED OR MEMORANDUM – STAMP DUTY?? OF SALE / CONVEYANCE; OF LEASE / LEAVE & LICENSE/; OF PARTNERSHIP / LLP; OF GIFT; etc. SUPPLEMENTARY – used when modifying the original Deed / Agreement.
Why DEED or MEMORANDUM ?? DEED A Document constituting the Agreement between the parties – Generally, subject to Stamp Duty. Examples Deed of Transfer / Sale Deed Partnership Deed Lease Deed MEMORANDUM A Document merely reciting the Terms of an Oral Agreement entered into & executed by the parties – may not be subject to Stamp Duty Examples Memorandum of Confirmation of Gift (Not being of Immoveable Property) Memorandum of Confirmation of Oral & Total Partition of a HUF. Memorandum of Leave & License
2. DATE OF EXECUTION The date on which deed has been executed. Date should be written in words and in figures. An Undated Deed is valid but subject to burden of proof.
3. PLACE OF EXECUTION This DEED of Partnership is executed at (Surat) this (First) Day of (March), (Two Thousand and Eleven) (01/03/2011) The place of execution specifies the territorial and legal jurisdiction.
This DEED of Partnership is executed at (Surat) this (First) Day of (March), (Two Thousand and Eleven) (01/03/2011) S P E C I M E N PARTNERSHIP DEED “This DEED of Partnership is executed at (Surat, Gujarat) this (First) Day of (March), (Two Thousand and Eleven) (01/03/2011):”
4. DESCRIPTION OF PARTIES Parties should be “CLEARLY & UNAMBIGOUSLY” described
Identification of the party –
In Case of Individuals - Name, Father’s Name, Address
In Case of Juridical Persons –
Name, Constitution, Address of Registered Office; &
Capacity & Authority of the Representing individual; &
Name, Father’s Name and Address of the representing individual
Contractual position with respect to the Deed – Transferor – mentioned First & Transferee – mentioned Last.
4. DESCRIPTION OF PARTIES INDIVIDUAL Mr. (Name) Son of (Father’s Name) Residing at (Address) HUF M/s (HUF Name) represented by its Karta Mr. (Name) Son of (Father’s Name) Residing at (Address) S P E C I M E N
4. DESCRIPTION OF PARTIES COMPANY M/s (Company Name), a Private Limited Company incorporated under the Companies Act, 1956, having its registered office at (Reg. Off. Address) represented by its Director Mr. (Name) Son of (Father’s Name) Residing at (Address) duly authorised by Board Resolution dated (Date). S P E C I M E N
5. RECITALS Contain the Background / factual details of the transaction between parties Begin with the words “WHEREAS” Normally used to narrate the History of the property, Title or nature of interest Relations between the parties Actions taken by the parties till the date of Execution of the Deed / Agreement Reasons for execution of the Deed / Agreement Continued
5. RECITALS Recitals control the operative part of the Deed. They operate as ESTOPPEL and are good evidence of the Facts either as admissions or substantiative evidence . Are not admissible against persons not parties to the Deed. Continued
6. TESTATUM Witnessing Clause – After Recitals & Before the Terms & Covenants “NOW THEREFORE, THIS DEED WITNESSES THE SAID TERMS & COVENANTS OF …. AS FOLLOWS:”
7. COVENANTS (TERMS) Consideration Receipt Premises HABENDUM – To Have & Hold Exceptions & Reservations, if any Other Terms & Conditions such as Dispute Resolution, Jurisdiction, Governing Law, Definition of the Terms used in Agreement, Sets & Counterparts, etc.
8. TESTIMONIUM Testimony Clause – After the Terms & Covenants & Before Attestation “IN WITNESS WHEREOF, the parties named above have set and subscribed their hands and seal to this DEED on the day, month and year first above mentioned.”
9. ATTESTATION Signature (with seal, applicable in case of Juridical persons) of all of parties to the deed should be attested and witnessed by two parties.
10. ANNEXURE &/OR SCHEDULES Annexures & Schedules form part of the DEED. Annexures & Schedules are used to: describe the property & may contain – Site plans, Maps & photographs of the property List – documents, etc.
11. ENDORSEMENTS Endorsements means “write on back” Used only on Negotiable Instruments Eg. Bills of Exchange, Cheques, etc. Transfer of Interest in Deed / Document in favour of another party
12. SUPPLEMENTARY DEED Supplementary deed is the one which is entered between parties on same subject on which a prior Deed / Document exists. Generally used to Rectify Errors or Omissions; Modify or Cancel the terms of the original Deed / Agreement.
CERTAIN STANDARD CLAUSES IN DEEDS DISPUTE RESOLUTION JURISDICTION GOVERNING LAW TO PREVAIL DIVISIBILITY OF THE AGREEMENT ENTIRE AGREEMENT BETWEEN THE PARTIES SUPERSESSION OF EARLIER AGREEMENTS MODIFICATION OF THE AGREEMENT PARAGRAPH HEADINGS SETS & COUNTERPARTS
1. DISPUTE RESOLUTION “Where any dispute arises between the partners and the partners cannot settle the same amicably and mutually, the same shall be referred to a Sole Arbitrator. The process of Arbitration / Conciliation shall be governed by the provisions of the Arbitration and Conciliation Act, 1996 and any statutory modification or re-enactment thereof for the time being in force. The venue, language of proceedings and fees and cost of Conciliation / Arbitration shall be decided by the parties hereto and in the absence of any unanimity thereof, the decision of the Arbitrator or Panel of Arbitrators, as the case may be, shall be final and binding on the parties.”
2. JURISDICTION “The Jurisdiction for all Civil / Criminal disputes relating to or arising pursuant to this DEED / AGREEMENT between the parties hereto or their legal representatives shall be in the Courts of (District) in the state of (State).”
3. GOVERNING LAW TO PREVAIL/ SAVINGS “If any of the clauses of this Deed / Agreement is repugnant or derogatory to the provisions of (Governing Law) or any statutory modification or re – enactment thereof for the time – being in force, then the provisions of the (Governing Law) shall always prevail.” SAVES THE DEED / AGREEMENT FROM BECOMING UNLAWFUL / VOID.
4. DIVISIBILITY OF THE AGREEMENT “The invalidity of any provision in this Deed / Agreement shall not affect the continuing enforceability of the remaining provisions thereof.” SAVES THE DEED / AGREEMENT FROM BECOMING UNLAWFUL / VOID.
5. ENTIRE AGREEMENT BETWEEN THE PARTIES “This Deed / Agreement along with the Schedule(s) and Annexure(s) hereto constitutes the ‘Entire Agreement’ between the Parties hereto with respect to matters referred herein.” PREVENTS THE IMPORT OF TERMS OTHER THAN THOSE STATED IN THE AGREEMENT BY DISPUTING PARTIES WITH REFERENCE TO ANY ORAL OR WRITTEN COMMUNICATION BETWEEN THE PARTIES PRIOR TO OR AFTER THE AGREEMENT
6. SUPERSESSION OF EARLIER AGREEMENTS “This Deed / Agreement supersedes all previous agreements, express or implied between the parties hereto.” PREVENTS THE IMPORT OF TERMS OTHER THAN THOSE STATED IN THE AGREEMENT BY DISPUTING PARTIES WITH REFERENCE TO ANY ORAL OR WRITTEN COMMUNICATION BETWEEN THE PARTIES PRIOR TO OR AFTER THE AGREEMENT
7. MODIFICATION OF THE AGREEMENT The terms and conditions of this Deed / Agreement can be Altered / Modified / Varied / Reduced / Added / Amended / Cancelled at any time with the mutual consent of all the parties hereto expressed in writing.
8. PARAGRAPH HEADINGS “The paragraph headings are provided for convenience only and do not signify the meaning and intent of the parties hereto, and in no case shall be used to construe or interpret the terms of this Deed / Agreement.”
9. SETS & COUNTERPARTS SETS What is a SET True Copy of the Deed / Agreement having equal authority. Clause “This DEED / AGREEMENT has been entered into (#) Sets, each being a True Copy of the other and retained by the parties hereto.” COUNTERPARTS What is a COUNTERPART “Part of the Deed / Agreement attested by one or more parties but not all” – All Counterparts together constitute the DEED Clause “This DEED/ AGREEMENT has been entered into (#) Counterparts, all parts together constituting the DEED.”