Under Hand or Deed - Limitation

This blog relates to English Law.

We are regularly asked whether a contractor should execute a contract under ‘Hand’ or ‘Deed’. If in any doubt, you should take legal advice on how an agreement should be entered into or executed. The principal difference is that the former limits the time a party can bring a claim under the contract to six years and the latter twelve years – from the date the breach occurred. Limitation is governed in England and Wales by the Limitation Act 1980.

If a claim (cause) arises outside these limitation periods, it may be time-barred. It’s important to understand that the limitation generally runs from the date the cause of action occurred. Different causes of action may have different limitation periods. It’s also important to remember that it’s likely that a technical issue may give rise to a claim - therefore, in deciding what to do - you need to look at both the legal advantages/disadvantages and the propensity of technical issues arising over time.

Remember, contracts work both ways - before deciding which method is to your advantage, weighing up what liabilities you want to continue (or restrict) past completion to a particular limitation period and why, is essential.

In Scotland, limitation times are different and governed by the Prescription and Limitation (Scotland) Act 1973. Generally speaking, the contractual limitation is five years.