- What executing an agreement means and why it exists
- The two questions every execution must answer
- Individuals: signing in your own name
- Partnerships: who can bind the firm
- Trusts: signing in a representative capacity
- Electronic execution: signing without the pen
- Where execution commonly goes wrong
- When a lawyer should review the execution
- The signature page decides who is bound
What executing an agreement means and why it exists
When two businesses reach a deal, the contract is not usually finished until it has been executed. Execution is the formal signing step. It is the moment signatures are applied to the document, and it is the point at which anyone reading the page can see who is bound and in what capacity they signed.
Execution matters because a signature is the evidence of agreement. If the wrong person signs, or signs in the wrong capacity, or signs without authority, the other side can be left with a document that cannot be enforced. A party who wants to escape their obligations can argue that the agreement was never properly executed. That turns a straightforward commercial deal into a dispute about a formality that should have been settled at the signing table.
This guide walks through the machinery of execution for the four structures Australian businesses most commonly use: individuals, partnerships, companies and trusts. It covers who must sign, what each signature achieves, and where the process commonly breaks down. It also touches on a distinction that causes confusion: an ordinary agreement is not the same as a deed, and deeds carry stricter formalities of their own.
The two questions every execution must answer
Before anyone picks up a pen, two questions decide whether the execution will hold up:
- Who signs: The answer depends on the entity. An individual signs personally. A partner may sign for the firm. A company signs through its directors, its company secretary, or an authorised agent. A trustee signs in a representative capacity.
- In what capacity: The signature block should make clear whether the person is binding themselves, the partnership, the company, or the trust. Ambiguity on this point is where enforceability disputes start.
There is also a third player in the picture: the counterparty on the other side of the table. The law protects counterparties who deal with companies in good faith through a set of statutory assumptions, discussed below, but those protections depend on the execution page looking the way the law expects it to look. Getting the page right protects both sides.
Individuals: signing in your own name
For an individual contracting on their own behalf, there are no special statutory rules about how to sign an ordinary agreement. The agreement needs the individual's signature, and it is good practice to print the name beneath the signature line so there is no doubt about who signed.
Best practice is to sign in front of an independent witness, who also signs and prints their name. A witness does not add legal validity to an ordinary agreement between individuals, but it creates evidence that the named person actually signed. That evidence is valuable if one party later claims the signature is not theirs, or that they did not understand what they were signing.
The position changes for deeds. Under s 38 of the Conveyancing Act 1919 (NSW), every deed must be signed and attested by at least one witness who is not a party to the deed. The other states and territories have equivalent rules, and a deed executed without the required attestation may not take effect as a deed. If your document is expressed to be a deed, check the attestation requirement before signing, rather than treating it like an ordinary agreement.
A few categories of transaction carry their own signing requirements on top of the general position. Dealings with land, wills, and certain finance documents are the usual examples, so it pays to confirm the specific rules before assuming the standard approach applies.
Partnerships: who can bind the firm
A partnership is not a separate legal entity. The contract is made by the partners, and execution binds the partnership because each partner is an agent of the firm. In NSW, s 5 of the Partnership Act 1892 (NSW) provides that every partner is an agent of the firm and of the other partners for the purpose of the partnership business. An act done in the usual way of carrying on that business binds the firm and the other partners, unless the partner in fact had no authority and the person dealing with the firm either knew that, or did not know or believe the person was a partner.
In practice, that means any individual partner can usually sign an agreement that binds the whole partnership, provided the transaction is within the ordinary course of the partnership's business. Two qualifications matter.
First, the partnership agreement may restrict who can sign. Many partnership agreements require the signatures of more than one partner, or require approval before certain transactions are entered. The important nuance is that under s 5 a restriction the other side never knew about may not stop the firm being bound anyway. A firm that wants to rely on internal signing restrictions should tell its counterparties about them in writing before contracts are signed.
Second, the signature block should identify the partnership being bound. The partner signs, prints their name, and the block names the firm, for example "for and on behalf of ABC Partners". As with individuals, having an independent witness sign is best practice and provides useful evidence if a signature is later disputed.
Companies: the Corporations Act machinery
A company is a separate legal entity, so execution must always be traced back to a person with authority to act for the company. The Corporations Act 2001 (Cth) sets out the machinery.
The three signature combinations
Under s 127 of the Corporations Act 2001 (Cth), a company executes a document without using a common seal when the document is signed by:
- two directors of the company; or
- a director and a company secretary of the company; or
- for a proprietary company that has a sole director, that sole director, provided the director is also the sole company secretary, or the company has no company secretary at all.
The third combination is broader than many business owners realise. A proprietary company with a sole director and no appointed secretary can be validly bound by that director's single signature. This is the most common situation for a small business that has never appointed a secretary. If the company has two directors, or has appointed a secretary who is not the sole director, then a single signature is not enough to satisfy s 127.
A company can also execute a document as a deed under s 127(3) if the document is expressed to be a deed and is executed in one of the ways above. Since the technology neutral signing reforms, a deed signed under s 127(1) does not need to be witnessed, and delivery of the document is not necessary. Corporate deeds are therefore a straightforward process in practice, which is one reason large transactions often use them.
The common seal
A company may still execute documents using its common seal. Under s 127(2), the seal must be fixed to the document and the fixing witnessed by the same combinations: two directors, or a director and a company secretary, or a sole director in the circumstances described above. The Act also allows the fixing of the seal to be witnessed by electronic means.
The common seal is now uncommon in practice. Most companies execute by signature under s 127(1), and counterparties receive the statutory protections discussed below either way. A company that still keeps a seal should control it carefully, because a document bearing the seal and apparently witnessed in accordance with s 127(2) carries a strong presumption of due execution.
Agents and other authorised signatories
A company's power to make contracts and execute documents can also be exercised by an individual acting with the company's express or implied authority, under s 126 of the Corporations Act 2001 (Cth). This is how larger companies handle high volumes of contracts: a designated officer or employee signs, with the authority recorded in a board resolution, an internal delegation, or a power of attorney.
Section 126 is flexible. The agent does not need to be appointed by deed, can execute a deed on the company's behalf without witnessing, and does not need to use a seal. What the company must not skip is recording the grant of authority. If a dispute later arises, the company needs to be able to point to the resolution, delegation or power of attorney that gave the signatory authority. An agent who signs without that paper trail leaves the company open to argument that the contract was never validly made.
What the other side can assume
Execution machinery would slow commerce to a halt if every counterparty had to verify a company's internal processes before each signature. Section 129 of the Corporations Act solves this by giving people who deal with a company a set of assumptions they can rely on. Among other things, a person may assume that:
- anyone who appears, from the company's public records at ASIC, to be a director or company secretary has been duly appointed and has the usual authority of that office;
- anyone held out by the company as an officer or agent has been duly appointed and has the usual authority of that kind of officer or agent;
- a document has been duly executed if it appears to have been signed in accordance with s 127(1), including that a person who states next to their signature that they are a director or a company secretary is telling the truth;
- a document bearing the company's common seal has been duly executed if the seal appears to have been fixed and witnessed in accordance with s 127(2).
These assumptions are why the execution block matters to the counterparty as much as to the company. The cleanest protection comes when the block follows the s 127(1) pattern and states each signatory's office. A signature that does not identify the signer's role, or that is applied by someone who is not in fact a director or secretary, leaves room for argument about whether the document was executed in accordance with the Act.
Trusts: signing in a representative capacity
A trust is not a separate legal entity either. The trustee holds the assets and enters contracts in that capacity, so the execution question becomes: who is the trustee, and how do they sign?
The starting point is that a trustee executes in the same way as the underlying entity. An individual trustee signs as an individual would. A corporate trustee signs through the company machinery in s 127, typically by its director or directors. What changes is the capacity in which the signature is given.
The signature block should state that capacity expressly, usually in the form "as trustee for [trust name]" or with the abbreviation ATF. This tells the counterparty who the contracting party actually is and makes it much harder for either side to later argue about the capacity in which the document was signed. A trustee who signs without identifying the trust can face a dispute about whether they intended to be bound personally, and a counterparty can be left unsure which entity it is actually dealing with.
Both sides should also check the trust deed before signing. The deed should confirm that the trust exists, who the current trustee is, and that the trustee has power to enter the particular transaction. Some trust deeds restrict the trustee's power to borrow, give guarantees, or enter long-term contracts. A counterparty that has not checked the deed may find the trustee unable to perform, and a trustee that has not checked the deed may have signed beyond its powers.
Electronic execution: signing without the pen
Electronic execution is now routine for Australian business documents, and the law has caught up with it. The machinery has three layers worth knowing about.
For companies, the Corporations Act expressly provides that the requirement to sign a document may be satisfied electronically, under the technology neutral signing provisions in Part 1.2AA of the Act. A company can also execute a deed electronically, without witnessing and without any physical document existing at all, under s 127(3A).
For individuals and other signers, s 10 of the Electronic Transactions Act 1999 (Cth) provides that a signature required under a law of the Commonwealth is taken to be given if a method is used that identifies the person and indicates their intention, and that method is as reliable as appropriate in the circumstances. The states and territories have mirror legislation that applies the same approach to state law requirements, so the position is broadly consistent across Australia.
In NSW, s 38A of the Conveyancing Act 1919 goes further and allows a deed to be created in electronic form and electronically signed and attested.
The practical message is that an exchange of signed PDFs by email, or a signature collected through a commercial digital signing platform, will usually satisfy the signature requirement for an ordinary agreement. The caveats are the same as for wet-ink execution: the right person must sign in the right capacity, and a few documents, such as certain land dealings, still carry particular requirements of their own. If the document is a deed or involves a special category, confirm the electronic route is safe before relying on it.
Where execution commonly goes wrong
The pattern across all four structures is the same. Execution fails not because signing is difficult, but because the wrong person signs, the capacity is unclear, or the authority is not recorded. The common trouble spots are:
- The sole director who signs alone: The single-signature route in s 127(1)(c) only works for a proprietary company with a sole director who is also the sole company secretary, or whose company has no secretary. A company with two directors, or with a separate secretary, cannot be bound by one director's signature.
- Agents without a paper trail: An employee who signs on the company's behalf without a board resolution, delegation or power of attorney leaves the company open to argument that they lacked authority.
- Trustees who omit the ATF label: Failing to identify the trust on the execution page leaves the capacity of the signatory open to dispute.
- Partners who ignore the partnership agreement: A signing restriction buried in the partnership agreement may not protect the firm if the counterparty never knew about it.
- Deeds treated like ordinary agreements: An individual's deed that lacks the required witness attestation may not take effect as a deed at all.
Each of these is a small fix at the drafting stage and a potentially large problem once a dispute starts.
When a lawyer should review the execution
A commercial lawyer's role here is narrow but valuable, and it is best played before the document goes out. A lawyer can:
- confirm the entity type and check the governing documents, including the company constitution, the partnership agreement and the trust deed, for restrictions on who may sign;
- draft or review the execution block so it identifies the signatory, their office, and the capacity in which they sign;
- verify and properly record the authority of an agent or attorney who will sign on behalf of the company;
- advise on whether the document should be a deed rather than an agreement, and on the formalities that follow from that choice;
- confirm whether electronic execution is safe for the particular document, including any special category of transaction.
The cost of that review is small compared with the cost of litigating whether a contract was ever validly formed. A lawyer who reviews the execution page before signing can also pick up the underlying issues that execution reveals, such as a trust deed that does not authorise the transaction or a company that has never recorded who may sign for it.
The signature page decides who is bound
The last page of a contract looks like an administrative afterthought. It is not. It is the page a court looks at first when one party tries to walk away from a deal, because it records who signed, in what capacity, and with what authority. The businesses that avoid execution disputes are the ones that can answer those three questions from the execution page alone: who signs, in what capacity, and on what authority. If your execution page does not answer all three, fix the page before you sign, or have a lawyer review it first. That is a five-minute check that can save a six-figure dispute, and it is exactly the kind of question a free initial consultation can resolve quickly.