Legal Definitions - contract under seal

A contract under seal refers to a formal agreement that, historically, was made legally binding by the attachment of a physical seal (often wax) alongside the parties' signatures. This seal served as a symbol of the parties' serious intent to be bound by the terms of the agreement.

In many legal systems, the presence of a seal meant that the contract was enforceable even without "consideration" – the exchange of something of value between the parties – which is typically a fundamental requirement for most contracts. While the use of physical seals has largely diminished in modern law, some jurisdictions still recognize the concept. In these cases, a seal might be represented by a written indication like "L.S." (meaning "locus sigilli," or "place of the seal") or a specific clause stating that the document is "signed and sealed." The legal effect of a contract under seal can vary by jurisdiction but historically included a longer statute of limitations for enforcement and the presumption of consideration.

• Example 1: Historical Land Deed

  In the late 1800s, a wealthy benefactor, Mrs. Eleanor Vance, decided to donate a significant parcel of land to establish a public park for her town. To ensure the donation was legally unchallengeable and to express the solemnity of her gift, her lawyer prepared a formal deed. When Mrs. Vance signed the deed, she also pressed her personal wax seal, bearing her family crest, next to her signature.

  Explanation: This deed would be considered a contract under seal. The physical wax seal, affixed by Mrs. Vance, demonstrated her clear and formal intent to transfer the land. In that era, the seal would have made the donation legally enforceable even though the town did not provide any "consideration" (i.e., pay money or exchange something of value) for the land, which would typically be required for a standard contract.

• Example 2: Modern Promissory Note with Formal Language

  A small business owner, Mr. David Kim, secures a substantial private loan from an investor, Ms. Lena Rodriguez. Ms. Rodriguez's legal counsel drafts a detailed promissory note and insists that it be executed with the highest degree of formality. The document includes the phrase "Witness my hand and seal" directly above the signature lines for both parties, and next to each signature, the letters "L.S." are printed within parentheses.

  Explanation: Even without a physical wax seal, the explicit language ("Witness my hand and seal") and the "L.S." notation indicate the parties' intention to create a contract under seal. In jurisdictions that still recognize this concept, this might provide Ms. Rodriguez with a longer period to sue Mr. Kim if he defaults on the loan, or it might create a stronger presumption of enforceability compared to a standard promissory note.

• Example 3: Corporate Bond Certificate

  A large technology corporation issues new corporate bonds to raise capital for expansion. Each bond certificate, which represents the company's promise to pay the bondholder a specific amount of money plus interest over time, is signed by authorized corporate officers and bears the company's embossed corporate seal.

  Explanation: The corporate seal affixed to each bond certificate signifies the company's formal and binding promise to honor the terms of the bond. While modern corporate seals are typically embossed rather than wax, their presence on such formal financial instruments historically and sometimes currently serves a similar function to a personal seal, indicating a high degree of formality and commitment to the contractual obligations.