Why checking signatory authority and execution formalities could mean the difference between a six-year and 12-year limitation period.
The terms of the contract have been negotiated and the parties are ready to execute. The lawyer emails asking for the full name of the person who will execute the contract as a deed. At that stage, it can feel like an unnecessary question. After all, the important part, the agreed contractual terms, has already been settled. So why do lawyers ask?
In construction contracts under English law, it is standard market practice for key documents, such as appointments and building contracts, to be executed as deeds. This allows the contracts to benefit from the extended 12-year limitation period under section 8 of the Limitation Act 1980. This is particularly important given that defects in construction works may only become apparent several years after practical completion.