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Discharge Deed Template for New Zealand

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Key Requirements PROMPT example:

Discharge Deed

"I need a Discharge Deed to release ABC Manufacturing Ltd from its obligations under a $2.5M loan agreement dated January 15, 2025, including releases for two personal guarantors and the discharge of associated security interests over company assets."

Document background
A Discharge Deed is a crucial legal instrument used in New Zealand business and commercial transactions to formally terminate and release parties from their existing obligations. This document is typically employed when parties wish to conclude their contractual relationship, settle outstanding matters, or release security interests. The deed must be drafted in compliance with New Zealand law, particularly considering the Property Law Act 2007 and the Contract and Commercial Law Act 2017. It includes essential details such as the nature of the original obligation, any settlement terms, mutual releases, and warranties. The Discharge Deed is particularly important in situations involving loan agreements, guarantees, security arrangements, or other significant commercial obligations where a formal release is required for legal certainty and proper documentation.
Suggested Sections

1. Parties: Identifies all parties to the deed, including the obligor, obligee, and any other relevant parties

2. Background: Recitals setting out the context of the original obligation and the circumstances leading to the discharge

3. Definitions and Interpretation: Defines key terms used in the deed and establishes rules for interpretation

4. Discharge and Release: Core provision that formally discharges the obligations and releases the relevant parties

5. Settlement Amount: Details of any payment or consideration being provided as part of the discharge

6. Mutual Release: Provisions for mutual releases between all parties regarding the discharged obligations

7. Warranties and Representations: Statements by the parties confirming their authority and capacity to enter into the deed

8. Further Assurance: Obligation to execute further documents or take additional steps if needed to give effect to the discharge

9. Governing Law: Specifies that New Zealand law governs the deed

10. Execution: Formal execution block for all parties to sign

Optional Sections

1. Confidentiality: Required when parties wish to keep the terms of the discharge confidential

2. Release of Security Interests: Needed when there are registered security interests to be released

3. Guarantor Release: Required when guarantors of the original obligation need to be released

4. Tax Treatment: Include when there are specific tax implications that need to be addressed

5. Survival of Obligations: Specifies any obligations that continue after the discharge

6. Return of Documents: Include when original documents need to be returned or destroyed

7. No Admission of Liability: Required when parties want to make clear the discharge is not an admission of liability

8. Costs: Include when there's a need to specify who bears the costs of the discharge deed

Suggested Schedules

1. Schedule 1 - Original Obligation Details: Details of the obligation being discharged, including dates, amounts, and reference numbers

2. Schedule 2 - Security Interests: List of any security interests to be released

3. Schedule 3 - Settlement Payment Details: Specific details of any settlement payment, including payment method and timing

4. Appendix A - Related Documents: Copies or details of related documents being discharged or released

5. Appendix B - Form of Release: Standard form releases to be filed with relevant authorities if required

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Financial Services

Banking

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Corporate Lawyer

Chief Financial Officer

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