Unsigned deed or contract: Nurisvan Investment Limited & Anor v Anyoption Holdings  VSCA 141
28 June, 2017Commercial Law & Business TransactionsCommercial Leasing, Landlord & Tenant DisputesDispute Resolution, Insolvency and LitigationProperty Law, Development & Conveyancing
The abovementioned appeal considered whether an unsigned deed or contact can, in fact, be binding. This issue is often a factual scenario faced by legal practitioners every day in advising their clients in circumstances where clients have not fully completed their paperwork.
At first instance, the Respondent had succeeded and the Appellant appealed and contended that the agreement between the parties was not binding for a number of reasons, including because the deed was not signed by one party.
The Victorian Supreme Court of Appeal, in this case, concluded that there is no reason why a document which has not been executed by a party cannot be binding. It found that in an appropriate commercial context, it can be considered binding.
The Court referred to a number of decisions including McDonald v John Twinane Limited  2 QB 304. In that case, an agreement was signed by one party but not executed by the other. The parties commenced performing their obligations under the agreement. However, they later became in dispute and one party alleged that the agreement was not binding. The Court concluded that it, in fact, was as the parties had acted on it and taken the benefit of it. The evidence confirmed that the parties regarded themselves as governed by the terms of the agreement and although it was not properly executed, the parties were bound by it as if they had executed it.
Reference was also made to the case of Commonwealth Dairy Produce Equalisation Committee Limited v McCabe  NSWStRp 30. In that case, a deed was not properly signed however the court observed that in the appropriate case, a person who omits to execute a deed may nevertheless, by accepting benefits under it, be bound by it. The Court can find an implied agreement.
Therefore in this recent case, the grounds of appeal by the appellant were not made out on this ground although they went on to win their appeal on the basis that the terms of the agreement in dispute were to “agree to negotiate in good faith” rather than there being a strict performable contract.
Please contact Tim Elliott, Partner, Bell Legal Group, Dispute Resolution, Litigation and Insolvency on 55001317 or firstname.lastname@example.org should you require advice in relation to a contractual dispute.