LEGAL PRINCIPLE: PROPERTY LAW – Delivery and Effective Date of a Deed – Deed Takes Effect From Moment of Delivery Not Execution
PRINCIPLE STATEMENT
A deed takes effect from the moment of delivery, not from the date of execution. Delivery may be conditional (escrow) until a condition is fulfilled.
RATIO DECIDENDI (SOURCE)
Per Iguh, JSC, in Awojugbagbe Light Industries Limited v. Chinukwe & Anor (1995) NLC-2431992(SC) at pp. 82–83; Paras A–C.
"The law appears to be well settled that any transaction created by deed ... does not come into effect prior to delivery. ... A deed takes effect from the moment of delivery as against any other written instrument which takes effect from the date of execution. ... In the case of a mortgage deed, the transaction becomes effective and binding only upon delivery, which may be conditional (escrow) until a condition (such as Governor's consent) is fulfilled."
EXPLANATION / SCOPE
A deed is effective upon delivery, not execution. Delivery may be absolute or conditional (escrow). The principle applies to all deeds. The date of execution is not determinative. The condition must be fulfilled before the deed becomes effective. The rule protects parties from unintended transfers. The burden of proving delivery is on the party claiming under the deed. The court will examine the circumstances of delivery. The principle is well-established in property law. The rule applies to mortgages, conveyances, and other deeds.