In land transactions, documentation is not merely procedural—it is foundational. From our collective experience as legal practitioners and advisers across multiple jurisdictions, we have seen countless disputes arise not because parties lacked intention, but because they misunderstood or misused the legal instruments required to transfer interests in land. Two such instruments that are frequently confused are the Deed of Assignment and the Deed of Gift.
Although both documents are used to transfer interests in land, they serve fundamentally different legal purposes. Using the wrong instrument can lead to defective title, invalid transactions, tax complications, and prolonged litigation. This distinction is especially important in jurisdictions influenced by common law, including much of Africa, the United Kingdom, Asia, and parts of the Caribbean.
In this comprehensive article, we explain the difference between a Deed of Assignment and a Deed of Gift in land transactions, using clear language, practical examples, judicial authorities, and academic commentary.
Understanding Deeds in Land Law
A deed is a formal written instrument that is signed, sealed, and delivered, evidencing an intention to be legally bound. Under common law, deeds occupy a special status because they can create or transfer legal interests in land, sometimes even without consideration.
Megarry & Wade describe a deed as “the most solemn form of assurance known to the law.” This solemnity explains why deeds are central to land transactions and why errors in their use can have serious consequences.
Among the various types of deeds used in property transactions, the Deed of Assignment and the Deed of Gift are particularly significant—and frequently misunderstood.
What Is a Deed of Assignment?
Definition
A Deed of Assignment is a legal instrument by which an existing proprietary interest in land is transferred from one party (the assignor) to another (the assignee) for valuable consideration.
The assignor transfers whatever interest they currently have in the land—no more and no less.
Legal Nature of a Deed of Assignment
A Deed of Assignment is typically used where:
- The land already has a subsisting title
- The interest being transferred is derivative, not original
- Consideration (money or money’s worth) is involved
In Ogunleye v Oni (1990) 2 NWLR (Pt. 135) 745, the Supreme Court held that an assignee can acquire no better title than that held by the assignor.
Practical Example
If A purchased land from B under a Deed of Assignment and later sells that land to C for value, the appropriate instrument is another Deed of Assignment.
Key Features of a Deed of Assignment
- Consideration is present
- Subject to the nemo dat quod non habet principle
- Transfers existing interest only
- Common in sale transactions
What Is a Deed of Gift?
Definition
A Deed of Gift is a legal instrument by which a landowner voluntarily transfers an interest in land to another person without valuable consideration.
The transfer is motivated by love, affection, charity, or benevolence rather than sale.
Legal Nature of a Deed of Gift
A Deed of Gift is characterized by:
- Absence of consideration
- Intention to make a voluntary transfer
- Immediate vesting of interest (once validly executed)
In Anyaegbunam v Osaka (2000) 5 NWLR (Pt. 657) 386, the court emphasized that a gift must be voluntary and unconditional to be valid.
Practical Example
If a parent transfers land to a child without payment, the appropriate instrument is a Deed of Gift, not a Deed of Assignment.
Key Features of a Deed of Gift
- No consideration
- Voluntary transfer
- Often used within families
- May attract different tax implications
Sale of Land: Why the Distinction Matters
In the context of the sale of land, the distinction between these two deeds is critical. A sale presupposes consideration. Where consideration exists, a Deed of Gift is inappropriate and may be challenged as a sham.
Courts look beyond the title of a document to its substance, but mischaracterization still creates legal risk.
In Savage v Uwaechia (1972) 3 SC 214, the Supreme Court reaffirmed that courts will examine the true nature of a transaction, not merely the label attached to it.
Deed of Assignment vs Deed of Gift: Key Differences
| Feature | Deed of Assignment | Deed of Gift |
|---|---|---|
| Consideration | Present | Absent |
| Nature | Commercial transaction | Voluntary transfer |
| Typical Use | Sale of land | Family or charitable transfer |
| Tax Treatment | Usually taxable | May have exemptions |
| Risk of Challenge | Lower if consideration proven | Higher if consideration is hidden |
The Role of Consideration in Land Transfers
Consideration is a cornerstone of contract-based land transactions. Its presence or absence often determines which deed is appropriate.
In Thomas v Thomas (1842) 2 QB 851, the court held that consideration must be real, though not necessarily adequate.
Key Point: Where money changes hands, a Deed of Assignment—not a Deed of Gift—is legally appropriate.
Registration, Stamping, and Consent Requirements
Both deeds generally require:
- Proper execution
- Stamping under stamp duty laws
- Registration at the land registry
- Statutory or governmental consent (where applicable)
In Akingbade v Elemosho (1964) 1 All NLR 154, unstamped deeds were held inadmissible in evidence.
Failure to perfect either deed weakens the transferee’s title.
Common Mistakes in Practice
From our experience, the most common errors include:
- Using a Deed of Gift to disguise a sale
- Failing to disclose consideration
- Ignoring tax and consent implications
- Assuming family transfers require no formalities
These mistakes frequently result in avoidable litigation.
Academic Commentary
According to Cheshire & Burn, assignments are “derivative transfers dependent on the assignor’s title,” while gifts are “gratuitous transfers perfected only by deed.”
This distinction reinforces why each instrument must be used correctly.
Frequently Asked Questions (FAQs)
1. Can land be sold using a Deed of Gift?
No. A sale requires consideration and should be documented with a Deed of Assignment or Conveyance.
2. Can courts invalidate a Deed of Gift if money was paid?
Yes. Courts may treat it as a sham transaction.
3. Which deed is safer for buyers?
A Deed of Assignment, where consideration is clear and documented.
4. Do both deeds require registration?
Yes, registration is essential to perfect title in most jurisdictions.
5. Can a gift of land be revoked?
Generally no, once validly completed, except in cases of fraud or mistake.
Conclusion
The difference between a Deed of Assignment and a Deed of Gift goes to the heart of land law and conveyancing practice. While both instruments transfer interests in land, they operate on fundamentally different legal foundations—one commercial, the other voluntary.
From our collective experience, correctly identifying and using the appropriate deed protects parties from defective title, tax exposure, and prolonged disputes. Whether in a sale transaction or a family transfer, understanding this distinction is essential for secure and legally valid land ownership across the globe.
This article is for educational purposes only and does not constitute legal advice. Readers should seek jurisdiction-specific professional guidance before executing land transfer documents.
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