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Most people assume that putting a signature on a document is all it takes to make an agreement legally binding. But in practice, execution — the formal process of signing and finalising an agreement — is far more nuanced than that, and getting it wrong can have serious consequences.
The reality is that who signs a document, and how they sign it, can be just as critical as the signature itself — particularly when it comes to how signing requirements differ across individuals, companies, and owners corporations. A document signed by the wrong person, or in the wrong way, may not be enforceable at all.
For companies operating in Australia, the rules are particularly important. Under section 127 of the Corporations Act 2001 (Cth), when a company executes a document in the prescribed manner, counterparties can rely on statutory assumptions without needing to investigate the company’s internal authority. That provides certainty — but only when the execution is done correctly.
The landscape has also evolved significantly when it comes to how agreements can be signed. The Electronic Transactions Act 2000 (NSW) provides a legal framework ensuring that electronic communications and transactions, including electronic signing, generally have the same legal standing as their paper-based counterparts, provided certain conditions are met. Physical, electronic, and counterpart execution are all now recognised pathways — but each comes with its own requirements, and the wrong choice for the wrong document can leave your agreement exposed.
Whether you’re involved in a strata matter, a commercial transaction, or a building and construction project, understanding the execution requirements for your specific agreement is essential to ensuring it stands up when it matters most.
In this episode of the Strata Law Podcast, Sachs Gerace Lawyers’ Despina Veleski walks through everything you need to know — from the different ways agreements can be signed, to the key factors that determine enforceability, and the common mistakes that are far easier to avoid than to fix.
