I’ve never been fond of the phrase execute and deliver, so this weekend I took the opportunity to revisit it. My conclusions are modest enough. Here they are, in case anyone’s interested.
This phrase execute and deliver (and its counterpart execution and delivery) is a standard feature of English-language contracts. As in the following obligation: The Borrower shall from time to time execute and deliver to the Bank, at the request of the Bank, all Financing Statements and other documents that the Bank requests. And as in the following representation: This agreement and the New Warrants have been duly executed and delivered by the Company. It follows that an opinion regarding execution and delivery is a standard element of legal opinions.
The meaning of execute is straightforward enough: a contract has been executed when it has been signed in the name of the party by someone who has authority to act on the party’s behalf. See Glazer and Fitzgibbon on Legal Opinions § 9.4 (2d ed. 2001).
I’m more interested in deliver. Fitzgibbon and Glazer § 9.5 says as follows:
The “duly delivered” portion of the opinion requires that the company, having duly authorized and executed the agreement, transfer possession of the agreement in a manner that under applicable law is sufficient to bring the agreement into effect as a binding obligation of the company. Normally, the company does this by physically delivering a signed copy of the agreement to a representative of the other party.
This would suggest that delivery is required for an effective contract. But whereas one of the necessary requirements of a contract under seal is delivery, that’s not the case with an informal contract:
All that is necessary to the creation of an informal contract, however, whether reduced to writing or not, is an expression of assent in any form. The writing itself is not necessary, if put in writing, a signature is not necessary. Even if in writing and signed, a delivery is not necessary. It is an expression of assent that is required. Delivery of a writing may be sufficient evidence of such an assent. Words of assent are sufficient, and conduct other than delivery may also be sufficient.
For the validity of an informal contract, a writing is necessary only when at least one of the parties has sufficiently expressed an intention not to be bound without one. In such a case, the agreement must be put in writing, and that writing must be presented to this party for an expression of assent. … If the reduction of the agreement to writing is thus made necessary, an assent to the writing as a sufficient one must also be manifested. This manifestation commonly consists of signing and delivery. This accounts for the fact that it has been held in many cases that the writing must be delivered. It may be true that merely reading over the terms of a writing is not a manifestation of assent to them. Even affixing one’s signature and continuing to hold possession of the paper may not express assent. Delivery to another person is indeed a common and an expressive act. But assent can be expressed effectively in many ways. Delivery is only one of them. One party may sign and hand the instrument to the other, it being already understood that the other shall retain possession of it. If the other then signs and pockets it, a contract has been made, effective as to both, although the first party made delivery before being bound and the second was bound without making delivery. If there has been expression of assent in no other manner, then there is no written contract without manual delivery.
1-2 Corbin on Contracts § 2.11.
So other than in the case of contracts under seal—such as deeds and leases, depending on state law—a representation (and opinion) regarding due delivery would seem meaningless.
And here’s a more general point: Given that signing a contract and handing the signed copy to the other party are just two ways to indicate assent, in certain contexts it would seem simpler to just refer to entry into the agreement in question: “The Company has all requisite corporate power and authority to execute and deliver [read enter into] this agreement.”
On the other hand, if its an obligation or a condition that Acme enter into a given contract, I’d want to make sure that Acme signs it and hands over the signed copy. In that context, it would make sense to refer to execution and delivery.
But even if my reservations about execute and deliver are well-founded, the fact is that in redrafting contracts, with one exception I’m going to leave execute and deliver well-enough alone. It’s not worth fighting a losing battle over.
The exception? In the concluding clause, I use are signing rather than have executed and delivered. See MSCD 5.5–10.