Sealing A Contract May Mean Nothing Or 20 Years!

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Explore:  Corporate Seals

The California Corporations Code endows corporations with certain rights, including the right to “adopt, use and alter” a seal.  Cal. Corp. Code § 207(a).  The Corporations Code does not define a “seal” but the Code of Civil Procedure does.  Under Section 1930,  a seal “is a particular sign, made to attest, in the most formal manner, the execution of an instrument.” 

While sealing conjures up visions of warm wax and signet rings, California generally permits a private seal to be made in one of the following three ways:

  • A stamp or impression capable of receiving a visible impression;
  • A scroll of the pen; or
  • By writing the word “seal” against the signature of the writer.

Cal. Code Civ. Proc. § 1931.  In addition, Section 1628 of the Civil Code provides that “A corporate or official seal may be affixed to an instrument by a mere impression upon the paper or other material on which such instrument is written.” 

In California, there appears to be little need for corporate seals.  Corporations Code Section 207(a) provides that “the failure to affix a seal does not affect the validity of any instrument”.  Section 1929 of the Civil Code, moreover, unequivocally states “All distinctions between sealed and unsealed instruments are abolished.”

Given California’s lack of legal regard for private seals, I was much astonished to learn that sealing a contract has a significant legal consequence under Delaware law.  According to this article by Louis G. Hering and Melissa A. DiVincenzo at Morris Nichols Arsht & Tunnell, “under Delaware law, a contact [sic] under seal is subject to a twenty-year statute of limitations.”  In support, they cite a troika of decisions from the Delaware Supreme Court, Superior Court and Court of Chancery.

Although California’s treatment of seals may appear to be the more modern, it is both long-standing and an echo of the more ancient and informal practices in Saxon times.  Civil Code Sections 1628 – 29 have been on the books since 1872.  Sir William Blackstone moreover relates that seals were little used in Saxon times and that it was conquering Normans who popularized waxen seals:

At the conquest, the Norman lords brought over into this kingdom their own fashions; and introduced waxen seals only, instead of the English methods of writing their names, and signing with the sign of the cross.  And in the reign of Edward I, every freeman, and even such of the more substantial villeins as were fit to be put upon juries, had their distinct particular seals.  The impressions of these seals were sometimes a knight on horseback, sometimes other devices: but coats of arms were not introduced into seals, nor indeed into any other use, till about the reign of Richard the first, who brought them from the croisade [sic] in the holy land; where they were first invented and painted on the shields of the knights, to distinguish the variety of persons of every Christian nation who resorted thither, and who could not, when clad in complete steel be otherwise known or ascertained.

Blackstone’s Commentaries on the Laws of England, Book II, Chapter 20 (footnotes omitted).  Neither king mentioned by Blackstone was a Norman, but they succeeded the Norman kings and carried memorable epithets.  Richard I, aka Coeur de Lion, was of the house of Anjou and reigned from 1189-1199 and Edward I, aka Longshanks, was a Plantagenet who reigned from 1272-1307.

 

Topics:  Corporate Seals

Published In: Business Organization Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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