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Drafting of deeds
 

Drafting of deeds

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    Drafting of deeds Drafting of deeds Presentation Transcript

    • 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
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      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
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    • 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
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    • 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.”
    • E: nirmal.ghorawat@icai.org
      W: http://www.canirmalg.wordpress.com