SEALS: What You Don't Know Can Really Hurt You!
The use of seals arises from ancient times when many people could not read and write. Their “seal” indicted their acceptance or endorsement of the relevant document. For a brief history of the use of seals in the legal contract, see From the History of Seals and Signatures, Information Security Solutions Europe Conference 2000 (Barcelona, Sept. 28, 2000). Many practitioners often overlook the ramifications of including the word “(SEAL)” after the signature line or including the phrase “executed under seal” in the agreement. It is often believed that such terms are an archaic reminder from earlier times, or that such terms are an acknowledgment that many corporations no longer have a corporate seal.
Sealed instruments or contracts do not require consideration to be binding. Restatement (Second) Contracts §95. See, e.g., Warten v. Moore, 366 S.E.2d 666 (Ga. 1988). Further, the use of the term “seal” may significantly extend the statute of limitations and the analogous period for laches. See, e.g., Whittington v. Dragon Group, L.L.C., 991 A.2d 1 (Del. Supr. 2009) (typing word “Seal” on signature line was sufficient to extend statute of limitations and analogous period for laches from 3 to 20 years). Under Maryland law, for example, use of the term “seal” extends the statute of limitations from 3 to 12 years. Md Cts & Jud. Proc. Code Ann. § 5-102(a) (5) (2006). The requirements for a sealed instrument vary by state. Under Maryland law, the signature lines need only to contain the term “(SEAL)” to be considered sealed. Warfield v. Baltimore Gas and Electric Company, 512 A.2d 1044 (Md. 1986). Under New York law, however, the agreement itself must contain an acknowledgment of the parties’ intent to have a sealed agreement. Transbel Inv. Co., Inc. v. Venetos, 18 N.E.2d 129 (NY 1938).