Cameron Miranda
In contract law, a seal affixed to a contract or legal instrument has held special significance at various points in history. While the use of seals has declined in importance, they are still used on contracts, often as an impression on paper. Seals were originally used to authenticate documents, and they continue to serve this purpose in some jurisdictions, such as Japan and Central and Eastern Europe. In the context of letterheads, the word seal can refer to a facsimile of the seal design, which may be used on official letterheads. However, it is important to note that the use of letterheads in contracts depends on the specific circumstances and may not serve a legal function. Certain types of agreements, such as those involving real estate, have specific formatting requirements that may not include letterheads.
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What You'll Learn
Contracts with letterheads and seals: Are they legally binding?
In the law, a seal affixed to a contract or other legal instrument has had special legal significance at various times in the jurisdictions that recognise it. The legal term 'seal' comes from the wax seal used throughout history for authentication. Originally, only a wax seal was accepted as a seal by the courts, but by the 19th century, many jurisdictions had relaxed the definition to include an impression on the paper, an embossed paper wafer affixed to an instrument, a scroll made with a pen, or the printed words "Seal" or "L.S." (standing for the Latin term 'locus sigilli', meaning "place of the seal").
In the courts of common law jurisdictions, a contract which was sealed ("made under seal") was treated differently from other written contracts (which were "made under hand"). This practice gradually fell out of favour in most of these jurisdictions in the 19th and early 20th centuries. Until modern statutory reforms in contract law, a seal was widely recognised by courts in common law jurisdictions as removing the need for consideration (value) in a contract. This reflects classical contract theory, in which consideration was viewed as a formal aspect of a contract, so a seal could be considered an alternative form.
In the context of contract law, a "Contract Under Seal" is a higher, more formal type of authentication than a signature. It indicates that the person sealing the contract has carefully considered the terms and was not pressured or tricked into signing. Under common law, a seal is necessary for a contract that doesn't give consideration to one of the parties. Normally, if both parties do not get something of value out of a contract, it is considered void.
In some jurisdictions, especially in Canada, it is a legal requirement for a professional engineer to seal documents in accordance with the Engineering Profession Act and Regulations. Professional engineers may also be legally entitled to seal any document they prepare. In the United States, the word "seal" is sometimes assigned to a facsimile of the seal design, which may be used in a variety of contexts, including on official letterheads. However, it is worth noting that in most U.S. states, there is no distinction between contracts under seal and signed contracts, and a seal is simply an acceptable substitute for a signature.
To conclude, the use of a letterhead on a contract serves no legal function and does not impact its enforceability. On the other hand, the presence of a seal on a contract can have legal significance, depending on the jurisdiction. While the use of seals has fallen out of favour in some places, they may still be required or preferred in certain situations or industries. Therefore, it is important to seek legal advice specific to your jurisdiction to understand the legal implications of using letterheads and seals in contracts.
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![A treatise on the law of contracts not under seal By William W. Story 1844 [Leather Bound]](https://m.media-amazon.com/images/I/81HiC2Oig0L._AC_UY218_.jpg)
The evolution of seals in contract law
The use of seals in contract law has evolved significantly over time, particularly in common law jurisdictions. The concept of a contract under seal dates back to medieval England, when most adults were illiterate and unable to sign their names. To execute a contract, each party would impress their individual mark of identification, often in the form of a wax seal, onto the document.
The wax seal, or seal made under seal, was originally the only type of seal accepted by courts in common law jurisdictions. This practice gradually evolved, and by the 19th century, courts accepted a variety of alternatives, including impressions on paper, embossed paper wafers, scrolls made with a pen, or the printed words "Seal" or "L.S." (locus sigilli, meaning "place of the seal").
Seals were once widely recognised by courts as removing the need for consideration (value) in a contract. This reflected classical contract theory, where consideration was viewed as a formal aspect. The use of a seal indicated that a legal transaction was intended and served to impress upon the parties the significance of the agreement.
However, in the 19th and early 20th centuries, the practice of sealing contracts fell out of favour in most common law jurisdictions. Statutory reforms further reduced the significance of seals, and legislatures in most of these jurisdictions changed the rules regarding seals. For example, the Companies Act of 1989 in England and Wales removed the requirement for companies to have a common seal, allowing contracts to be executed by company officers instead.
Today, seals are rarely used in contracts, and their legal significance has diminished. However, they are still employed in certain situations, such as when companies choose to use seals to execute deeds, and they may still enjoy a longer statute of limitations for enforcement.
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Letterheads as a substitute for seals
A seal affixed to a contract or other legal instrument has had special legal significance at various times in the jurisdictions that recognise it. Originally, only a wax seal was accepted as a seal by the courts, but by the 19th century, many jurisdictions had relaxed the definition to include an impression on the paper on which the instrument was printed, an embossed paper wafer affixed to an instrument, a scroll made with a pen, or the printed words "Seal" or "L.S." (standing for the Latin term locus sigilli, meaning "place of the seal").
In the context of contract law, a "contract under seal" is a higher, more formal type of authentication than a signature. It serves as evidence of the existence of a contract and demonstrates the intention of the parties to enter into a legal transaction. Historically, a seal was also considered a substitute for consideration (value) in a contract, although this has been reduced by modern statutory reforms.
While the use of seals has become less common in Western countries, they are still prevalent in Central and Eastern Europe, as well as East Asia, where a signature alone is considered insufficient to authenticate a document. In these regions, managers and employees often possess personal seals containing their names and positions, which are applied to letters, invoices, and similar documents.
In the United States, the word "seal" can refer to a facsimile of the seal design used on official letterheads. However, it is important to note that the use of letterheads with a seal design does not carry the same legal significance as affixing a physical seal to a contract. While a letterhead with a seal design may convey a sense of professionalism, it does not serve any legal function and may not be recognised as a valid substitute for a signature or an actual seal.
Therefore, while letterheads with seal designs may be visually appealing and suggestive of authenticity, they do not carry the same weight as actual seals or signatures in contract law. The enforceability of a contract depends on various factors, including the presence of valid signatures, consideration, and compliance with any specific format requirements, such as those for real estate contracts.
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The legal function of letterheads and seals
A letterhead is a heading at the top of a sheet of letter paper that typically includes a company's logo, name, address, and contact information. It is a way for businesses to brand their correspondence and make a professional impression on clients and customers. A well-designed letterhead can help to establish credibility and create a sense of trust.
In terms of legal function, a letterhead serves no legal function in and of itself. However, depending on the type of contract, it may be appropriate to use a letterhead. Certain types of agreements must conform to a specified format and therefore cannot be on business letterhead. For example, contracts involving real estate have certain formatting requirements. However, in most other circumstances, it is perfectly acceptable to use a business letterhead.
Historically, a seal affixed to a contract or other legal instrument has had special legal significance in many jurisdictions. In common law jurisdictions, a contract which was "made under seal" was treated differently from other written contracts, which were "made under hand". This practice gradually fell out of favour in most of these jurisdictions in the 19th and early 20th centuries. The legal term "seal" arises from the wax seal used throughout history for authentication. Originally, only a wax seal was accepted as a seal by the courts, but by the 19th century, many jurisdictions had relaxed the definition to include an impression in the paper, an embossed paper wafer, a scroll made with a pen, or the printed words "Seal" or "L.S." (locus sigilli, meaning "place of the seal").
In the context of companies and other corporate bodies, the common law originally required that all contracts made by such a body had to be made under seal, whether they were deeds or not. This rule was gradually eroded away, being abolished in respect of companies in the first half of the twentieth century, and for other corporations by 1960. The Companies Act of 1989 removed the requirement for a company to have a common seal, although companies can still use seals to execute deeds if they wish, in which case the seal must be engraved.
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The use of letterheads and seals in real estate contracts
A letterhead does not count as a seal in contract law. However, certain types of agreements, such as contracts involving real estate, have specific formatting requirements. That being said, format is generally not important unless it is a contract "under seal".
Historically, a seal was a piece of wax, a wafer, or another substance that would retain an impression affixed to a contract. This was done to provide a level of formality and authentication. The use of a seal in a contract gave it special legal significance and was treated differently from other written contracts. This was because a seal demonstrated that a legal transaction was intended by the parties and substituted for consideration, which is necessary for a contract to be binding.
In modern times, many jurisdictions have relaxed the definition of a seal to include an impression on the paper, an embossed paper wafer affixed to the contract, a scroll made with a pen, or the printed words "Seal" or "L.S." (standing for the Latin "locus sigilli", meaning "place of the seal").
In the context of real estate contracts, it is important to note that the use of seals and certain language may result in the contract being treated as a "specialty". For example, under Maryland law, a "specialty" contract is subject to a twelve-year limitations period, rather than the three-year period that would normally apply. Therefore, the use of seals and language about seals in real estate contracts can significantly alter the legal rights and risks of the parties involved.
In conclusion, while a letterhead does not count as a seal in contract law, the use of seals and specific language in real estate contracts can have important legal implications that should be carefully considered.
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Frequently asked questions
No, letterhead does not count as a seal in contract law. A seal is a higher, more formal type of authentication than a signature. It is usually in the form of an impression on paper.
A seal affixed to a contract or other legal instrument has special legal significance. It serves as evidence of the existence of a contract and demonstrates that a legal transaction was intended by the parties involved.
A contract requires "consideration", meaning that something of value must be promised to each party for it to be binding. A deed, on the other hand, may be a unilateral promise and thus requires no consideration.
In most Western countries, it is now unusual for private citizens to use seals. However, in some jurisdictions, such as Canada, certain professionals are legally required to seal documents. For example, engineers may be required to seal documents in accordance with the Engineering Profession Act and Regulations.
