Contracts Under Seal?

I’ve snickered at the notion of contracts under seal, but I’ve never studied the topic. Here’s what I found out:

In medieval England, a seal—consisting of wax attached to a writing and bearing an impression—served as a marker to identify the parties to an agreement. As literacy increased, signatures slowly replaced seals as identifying markers.

And the value of seals as a device for formally validating a contract dwindled as requirements regarding what constitutes a seal were relaxed. By judicial decision or statute, the presence of the word seal near the signature—even on a preprinted form—has been sufficient to make a contract one under seal. Likewise use of the phrase locus sigilli—meaning “the place of the seal”—or its abbreviation L.S. And some courts have found that a recital to the effect that the parties consider the document sealed is sufficient to consider it sealed, even if no seal is present—hence the formula signed, sealed, and delivered. These indicia of sealing are still in use.

Compared with a wax seal, such sealing can’t reasonably be considered conclusive evidence that the signer intended the sealed instrument to contain an enforceable promise. And one can’t expect someone signing a contract to pay attention to or understand such obscure notations. That explains why more than half the U.S. states have abolished the distinction between sealed and unsealed instruments, and why § 2-203 of the Uniform Commercial Code abolishes the distinction for sales of goods. Even those states haven’t abolished the distinction altogether have modified it sufficiently so that a seal has little lingering vitality.

In those jurisdictions that that haven’t abolished the distinction, whether or not a contract is under seal can have implications in two contexts.

First, a sealed contract is binding absent consideration, or at least creates a rebuttable presumption of consideration. But if under the law of a given state a contract is at risk of being held unenforceable for lack of consideration, making the contract one under seal probably wouldn’t be the safest fix, even if the law governing the contract acknowledges the distinction between sealed and unsealed instruments. Instead, you might want to restructure the transaction so as to provide for consideration; see MSCD 2.70.

Also, seals may be important in the context of statutes of limitations. The District of Columbia, for example, has a twelve-year statute of limitations for actions brought on “instruments under seal” as compared with the three-year statute for ordinary contracts. But one could question the priorities of any drafter who on that basis elects to inflict on a contract the utterly quaint indicia of a contract under seal.

So unless due to the nature of a given transaction and the law that governs it you have a very good reason for making the contract one under seal, eliminate from your contracts all references to sealing.

But what do you think? Do you use contracts under seal? If so, why? And what’s the status of contracts under seal in other common-law jurisdictions?

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.