Statute of Limitations and Contract Under Seal in Maryland

We have successfully defended many cases where the debt buyer plaintiff alleged that the statute of limitations was 12 years (not 3 years) because the contract was “under seal.”  We have prevailed in arguing that the statute of limitations is 3 years not 12 years in those cases where the contract did not meet the formal requirements to be considered “under seal.” 

            In Maryland, to be “under seal” the word “SEAL” or some equivalent must be near the signature.  If it not enough to recite “under seal” language in the body of the contract.  (There are even some instances, such as residential leases in Maryland, where the statute of limitations is 3 years regardless of whether the contract meets the formal requirements of a contract “under seal”).

The case of Warfield v. Baltimore Gas and Electric Company, 307 Md. 142 (1986) contains an extensive review of more than a century of Maryland jurisprudence on what constitutes a contract under seal.  In Warfield, the Court of Appeals held that the printed word “SEAL” after the signature of a guarantor is what transforms an ordinary contract into a contract under seal.  Quoting from an earlier case, the Court of Appeals confirmed that the affixation of an actual seal forms the bright line test between a contract under seal (also known as a “specialty”) and an ordinary contract:

…for whether an instrument be a specialty, must always be determined by the fact, whether the party affixed a seal; not upon the assertion of the obligor, in the body of the instrument, or by the form of the attestation.

Id. at 146 (citations and quotations omitted).

            As is discussed in Warfield and the cases cited therein, a seal is something that is clearly affixed to the document, whether it be a wax seal, a wafer or a scrawl as in olden-times, or a more modern affixation such as the word “SEAL” next to the signature on the document.

The Court of Appeals has stated that a contract is not under seal unless the word “seal” appears by the signatures:

[n]either the words ‘signed and sealed with our seals,’ in the body of the bond, nor the words ‘signed, sealed and delivered in presence of’ . . . are sufficient to constitute the instrument, the deed or specialty of one who does not in fact seal the instrument.

State, use of Gilkeson v. Humbird 53 Md. 327, 300 (1880), citing Stabler v. Cowman, 7 G. & J. 284 (1835). “‘[I]f the contract is signed by an individual opposite . . . a legally sufficient seal, the instrument will be taken as a sealed document where there is nothing . . . to indicate the contrary.’” Warfield, 307 Md. at 143, (quoting, General Petroleum Corporation v. Seaboard Terminals Corp., 23 F.Supp. 137 (D.Md. 1938)(emphasis original)).

CONTACT US: If you are being sued and the Plaintiff alleges there is a “contract under seal” subject to a 12 year statute of limitations, feel free to contact us for a consultation.