Contracts, terms of settlement and deeds of release – Litigation, Employment, Industrial, Commercial, Intellectual Property and Technology Lawyers
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Contracts, terms of settlement and deeds of release

Contracts, Terms of Settlement and Deeds of Release

 

It is critical for any agreement reached between parties to be properly recorded to ensure its enforceability. It is common in employment matters for an agreement to be reached between an employer and an employee when the employment relationship ends but situations can also arise during the course of the employment that generate the need for a contract or deed to be drafted.

 

The terms “contract” and “deed” are sometimes used interchangeably but they are actually different legal instruments. The main differences are:

 

  • A deed does not have to contain consideration for both parties which is a necessary element for a contract;
  • A deed can be operative before it is signed by both parties which is generally not the case for a contractual document; and
  • The statutory limitation period for a contrast is 6 years but it is 12 years for a deed.

 

As pointed out by Peter Butt, in Land Law (6th ed, 2010) [at 19141]:

 

The instrument’s self-description as a “deed” or as a mere “agreement” is also relevant, but not decisive: for the cases show that an instrument calling itself an agreement may be a deed and that an instrument calling itself a deed may be a mere agreement.
Deeds of release and settlement are often used in proceedings brought for unfair dismissal, general protections and workplace discrimination.

 

At Crawford de Carne Lawyers we can determine the appropriate legal mechanism to record your agreement and draft it in a professional manner that will ensure its enforceability. We can also add and adapt terms to ensure the outcomes desired are achieved by clients.

 

Deed of Release, Termination and Settlement

 

Releases are often provided in the deed document from claims that an employee could make or may have been able to make in the future. The terms of the arrangement can settle claims between the parties and be pleaded to bar proceedings brought contrary to the terms of the documents. It is very important to understand the risks and each provision of such a significant agreement.

 

Deeds are often presented to an employee by an employer to add certainty to the relationship, during for the purpose of terminating the employment and for matters after the employment has ended. Redundancy situations are common situations we see, within which employers ask that employees sign releases and settlement terms. The terms of the deed are often the subject matter of negotiations between the employer and the employee and payments are made pursuant to the terms of the deed. We can assist you with these significant decisions.

 

Grant v John Grant & Sons Pty Ltd [1] (Grant) is a case that concerned, and is often cited for, principles concerning the scope of general releases in deeds. Grant establishes the proposition that general releases will be construed in a fashion that does not exceed the true purpose of the transaction, as ascertained from the nature of the instrument. [2]

 

As an equitable principle, the defendant must not use the general words of the release in the deed as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction: Grant v John Grant & Sons (129). To do so, using the words in Grant v John Grant & Sons (130) is ‘unconscientious’.” [3]

 

[1] [1954] HCA 23(1954) 91 CLR 112.

[2] See Perth Airport Pty Ltd -v- Ridgepoint Corporation Pty Ltd [2013] WASC 33, at [88].

[3] See Connor v Uniting Church in Australia Property Trusts WA [No 2] [2011] WADC 113 (22 July 2011).

 

 

GENERAL AND CONTACT INFORMATION

 

The article, the content and references made are intended to keep an audience updated with information. It is not intended that the article or part of it should be relied upon as advice. Information provided may not apply to in all circumstances or in particular situations. If you do want particular advice or you have any questions, we welcome you to contact us on (02) 9004 7404 or at general@cdclaw.com.au