QLD Deed of Agreement to Repay Debt - Execution Problem?

[jeddaangus]

Hi. This is the first time visiting this forum, so thanks to all readers and contributors! I have two questions that relate to a Deed of Agreement, which covers an arrangement to repay a debt.
1. The document was executed by a Director and Company Secretary of a Pty Ltd company, but I have since discovered that the ACN details in the Deed of Agreement are incorrect, ie. the Director and CS have executed the document against the wrong ACN (one digit is wrong). Does this make the Deed invalid, or alternatively not legally executed under contract law? If so, what would be the effect of this discovery for one or both parties?

2. If, on occasion, the payment/s schedule as set out in the Deed needed to be adjusted and verbal agreement has been granted by the creditor, is this actually permitted, or does it contravene the obligation of the person who has executed the document?

I hope I have made my debt help query clear. Please feel free to seek clarification if required.
Thanks!

 

[Sophea]

Hi jeddaangus,

As for your first question, it is the tendency of courts to prefer substance over form when it comes to contracts. This means that if the intention of the document is clear i.e. if it is clear which company the parties mean to refer to, the fact that one digit in the ACN is incorrect will not nullify the document, as it is clearly an error. Therefore, short answer is - the document is a binding legally executed contract and you cannot get out of it on that basis.

Second question: Yes, the creditor is permitted to verbally agree to adjust a payment - so that it is different to what has been described in the deed, provided you agree to it also. This amounts to the creditor waiving their right to be paid as per the agreement for that particular payment, and altering the terms. There will be no conflict between any such verbal agreement and the written document, the subsequent verbal agreement will override it. It would not put an end to the agreement, and it would continue as per the written terms for subsequent payments. Obviously the creditor cannot alter the terms to make them more onerous - the change would have to be by mutual agreement with you.

 

[Sarah J]

Hi Jeddaangus,

I agree with Sophea.

1. Court will look to the degree of error and the intention of the parties. If the deed was executed in accordance with the creditor company's articles (i.e. the director and company secretary has power to act on behalf of the company) it would not matter whether the ACN is correct or not. An incorrect ACN will not invalidate a deed. Execution without power (i.e. not in accordance with the creditor company's articles or power of attorney) will.

2. Verbal agreements to vary the terms of the deed are acceptable. Make sure you get the verbal acceptance/agreement confirmed in writing. Otherwise it will be hard to prove in event the creditor company goes back on the verbal agreement.