Simple Contract v Deed
10/06/25This insight covers the requirements for creating a valid contract, as well as a deed and the differences between the two types of agreements. Understanding the differences between these two forms of agreement and the formalities required for each of them is essential to create a binding agreement.
The consequences of not complying with the formalities required can be fatal. For example, the document may not be legally treated as a deed if the formalities are not in place, even if that was the intention of the parties. Ultimately, a deed or contract may be void and therefore unenforceable if not drafted correctly. If the parties have gone to the trouble of negotiating a contract/deed, then they rarely intend for it not to be valid and fail.
Simple Contract | Deed |
Must have consideration, which means that something of value is exchanged between the parties. This could be a –
| No consideration required |
| Must be clearly labelled as a deed, intended by the parties to be a deed, and validly executed as a deed (see below) |
Used for everyday agreements, such as smaller works contracts, subcontract agreements, and supply contracts | Used for major construction build projects, design and build agreements, warranties, and guarantees |
Duration 6-year limitation period, which is a statutory limitation period that sets the time limit within which a legal claim must be brought. This is governed by the Limitation Act 1980. | Duration 12-year limitation period, which is a statutory limitation period that sets the time limit within which a legal claim must be brought. This is governed by the Limitation Act 1980. |
Signed by all parties to the contract | Signed by all parties to the contract and witnessed |
Can be signed electronically | Some deeds can be signed electronically depending on the governance of the parties. Witnessing is more complex, as the witness needs to be physically present |
No seal required | Fewer seals are applied than a few years ago (pre-COVID). Some bodies are required to apply a seal due to their governance requirements. Companies have the option to use a seal under the Companies Act 2006. For NHS Trusts, they often have governance policies in place requiring the application of a seal to validly execute a deed. |
How Capsticks can help
We aim to be the firm of choice for organisations who work to make a difference. Our legal experts understand the importance of robust contractual arrangements and can assist you in drafting a new partnership deed or revising and updating your existing one. If you have any queries around what's discussed in this insight and the impact on your organisation, please speak to Catherine Kay to find out more about how we can help.
