What deed means
A deed is a promise the law takes seriously because of how it was made, not because of what was exchanged.
An ordinary contract needs consideration: each side must give something. A deed does not. A promise made by deed binds even where the other party gives nothing at all, which is why gifts, releases and powers of attorney are made this way.
What replaces consideration is formality. A deed must be in writing, it must be clear on its face that it is intended as a deed, it must be signed by the party making it, it must be witnessed, and it must be delivered. Delivery is the act of showing an intention to be bound by it, which is usually inferred from execution and handing over.
The historic requirement was signing, sealing and delivering. Modern practice in Nigeria retains the language, and documents are still commonly expressed to be signed, sealed and delivered even where no physical seal is used.
How it is used
You meet deeds in a predictable set of transactions.
Land. A deed of assignment transfers a right of occupancy from seller to buyer, and a deed of sublease, mortgage or gift does the equivalent for other interests. In Nigeria a sale agreement does not transfer land. The deed does.
Powers of attorney, which are executed as deeds because the donor receives nothing in return.
Gifts of property, for the same reason.
Deeds of release, where somebody gives up a claim.
Debentures, where a company charges its assets.
Deeds poll, where one person unilaterally declares something, most commonly a change of name.
Execution requires care. Individuals sign before a witness who states their name, address and occupation. Companies execute in the manner their articles and CAMA provide. For land, the deed then goes for stamping, for Governor's consent where the transfer requires it, and for registration at the state lands registry.
Key features
- Binds without consideration, unlike a simple contract
- Must be in writing and clear on its face that it is a deed
- Must be signed, witnessed and delivered
- Carries a longer limitation period, commonly twelve years rather than six
- Required for transfers of land, powers of attorney and gifts
- Attracts stamp duty, and land deeds need consent and registration
How this works in Nigeria
Three practical points cause most Nigerian deed problems.
Stamping. A deed is a stampable instrument, and an unstamped deed can face difficulty being admitted in evidence until the duty and any penalty are paid. Assessment on a land deed is based on value, so this is not a trivial cost, but discovering it during a dispute is worse.
Governor's consent. Under the Land Use Act, an alienation of a right of occupancy requires the Governor's consent. A deed of assignment executed by everybody correctly and never taken for consent leaves the buyer with an incomplete title, and it is one of the most common defects in Nigerian land holdings.
Registration. A registrable instrument that is not registered may not be admissible to prove title, and it can fail against a later purchaser who registered first. An unregistered deed of assignment is worth far less than the buyer believes it is.
Witnessing is the fourth, quieter issue. A deed witnessed by somebody who cannot be traced years later is weaker than one witnessed by an identifiable professional whose details were recorded properly.
Deed vs agreement
Two ways of committing, distinguished by formality and by what each requires.
A simple agreement needs consideration. Each side gives something, and it can be verbal or written. The limitation period for suing on it is commonly six years under Nigerian state limitation laws.
A deed needs formality instead of consideration. It must be written, expressed as a deed, signed, witnessed and delivered. It binds a party who receives nothing, and the limitation period is commonly twelve years.
That difference decides which document you need. Selling land and receiving the price could in principle be an agreement, but the transfer of the interest itself is done by deed and Nigerian practice requires it. Giving property away can only sensibly be done by deed, because there is no consideration to support an agreement.
A useful shorthand: if one side gets nothing, use a deed. If land is changing hands, use a deed.
Limits and risks
Formality cuts both ways. A document intended as a deed but not properly executed may fail as a deed, and where there was no consideration it may then bind nobody at all.
A deed also cannot cure a defective title. A perfectly executed deed of assignment from somebody who had no right to the land transfers nothing.
Stamp duty and registration are real costs, and parties who skip them to save money create a document that is weaker than it looks.
And deeds are harder to unwind. Because they bind without consideration, a person who executed a deed under a misunderstanding has fewer arguments than one who merely made a promise.
Worth knowing
Stamp and register the deed, and take it for Governor's consent where the land requires it. Nigerian buyers routinely stop at the signed deed and treat the transaction as finished, and the missing steps only become visible when they try to sell, mortgage or defend the property years later.
Questions people ask
What is a deed?
A document executed with special formality that binds even without consideration. It must be in writing, clear on its face that it is a deed, signed, witnessed and delivered.
What is the difference between a deed and an agreement?
An agreement needs consideration from both sides and can be verbal. A deed needs formality instead and binds a party who receives nothing. Deeds also carry a longer limitation period, commonly twelve years against six.
Does a deed need a seal in Nigeria?
A physical seal is not the practical requirement. What matters is that the document is clear on its face that it is intended as a deed and that it is signed, witnessed and delivered. Documents are still commonly expressed as signed, sealed and delivered.
Which transactions need a deed?
Transfers of interests in land, powers of attorney, gifts of property, deeds of release, debentures and deeds poll such as a change of name. Anywhere one side receives nothing in return, a deed is the safer instrument.
Does a deed need to be stamped and registered?
Deeds are stampable instruments, and an unstamped deed can face evidential difficulty. Land deeds also generally require the Governor's consent and registration at the state lands registry to be fully effective.
Who can witness a deed?
Any person of full age and sound mind who is not a party and who was present at signing. Record their full name, address and occupation, because a witness who cannot be traced later is of little use if execution is challenged.