In this post I refer to “bills of sale, instruments of assignment, releases, deeds, powers of attorney, stock powers, and the like, in other words short documents, usually signed by one party, that consist largely or entirely of language of performance, with the signatory giving something to someone.”
But in the same post I quote from two documents that served analogous functions but were structured as unilateral contracts, with both sides signing. (Black’s Law Dictionary defines a unilateral contract as “A contract in which only one party makes a promise or undertakes a performance; a contract in which no promisor receives a promise as consideration from the promise given.”)
Anyone care to propose when you should use a one-signatory document and when you should use a unilateral contract?
4 thoughts on “When Should You Use a One-Signatory Document Instead of a Unilateral Contract?”
I think that Ken has answered his own question. Documents such as bills of sale, stock powers, and deeds are conveyancing documents. On signing of these documents, performance is complete and the parties have no ongoing relationship. Often these documents are signed in the context of a transaction that includes a document signed by two parties, such as an acquisition. In the acquisition agreement, the seller promises to sell assets at the closing. That sale is accomplished at the closing by the seller signing the bill of sale. Then, the parties are done with each other.
The two other documents in Ken’s post that include language of performance have two signatories because they are not unilateral contracts.
The assignment quoted in Ken’s post will have language of performance – the assignment of rights. But although the agreement is termed “assignment,” the substance of the contract is actually an assignment of rights and a delegation of obligations. Most careful lawyers insist that the obligations be expressly assumed, so the assignee/delegate becomes a party to the document – two signatories.
With respect to the mortgage, it has two signatories because although the grant of the security interest is complete on the signing of the document, performance is not complete. The mortgagor and the mortgagee will have an ongoing relationship and the agreement memorializes the mortgagor’s obligations and the mortgagee’s rights during the term of the mortgage. (The mortgagee may also have obligations.) Again, as with a bill of sale, the mortgage is typically signed in the context of a transaction – a loan – which is memorialized in a loan agreement signed by two parties.
The unilateral contract’s performance is not complete on signing – as with a conveyancing document. Here, some performance in the future is contemplated. It memorializes the beginning of the deal, not the performance promised in another contract.
I have seen bills of sale signed by the buyer, presumably to evidence delivery and acceptance of the goods.
As a solicitor, I have a client who wishes to relinquish a life estate given him by his deceased with with remaindermen as his children. He has determined to relinquish the life estate and transfer the share of the land they would otherwise receive upon his passing, at this time whilst he is alive. I am in NSW Australia and have determined under our laws that a Deed is required to consumate (for want of better term) the transaction. It is my view that the Deed requires his signature in two places, but only his signature; once in his personal capacity and once as in his capacity as executor of the Will leading to the Life Estate. I do not hold the view the children are required to accept the life estate as the estate is already theirs, excepting that does not crystalise until my clients death. In effect he is saying “I am still alive, but relinquish any right title and interest to the question land provided me by the Will of the deceased, my late wife”. Only his signatuire is required.. Any thoughts anyone?