Deeds, execution, delivery

To be effective, deeds have to be "delivered" within the meaning of the Law of Property (Miscellaneous Provisions) Act 1989 and the Law of Property Act 1925. Critically, the person signing the deed has to have separately indicated (by sufficient acts or words) that he intends to be bound by the deed. Signature alone is not enough and neither is physically handing the document over.

The defendants alleged the guarantees were not binding despite having been signed, witnessed and dated during a meeting with the claimant. This was because they had made manuscript notes of changes required to the documents before doing so, in the expectation that typed versions would be produced for them to sign and date afresh. They alleged that they had only signed the documents as a gesture of good faith. No clean documents had been produced, the guarantees had not been properly executed and so could not be enforced against them.

Bibby Financial Services Ltd v Magson and others

The court held that the purpose behind the meeting was crucial. The claimant said it was to sign the guarantee. However, the claimant had only sent its offer letter to the company the day before the meeting with the defendants. That made it unlikely that the purpose of the meeting was to sign the guarantees as the claimant contended. It was more likely, as the defendants contended, to be to discuss the offer with a view to reaching agreement on the form of wording with signature taking place subsequently.

The defendants had not intended to "deliver" the guarantees after signing them at the meeting and they were not therefore bound by them.

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