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. 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"), although this practice gradually fell out of favour in most of these jurisdictions in the 19th and early 20th century. The legal term seal arises from the wax seal used throughout history for authentication (among other purposes).
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 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").
Notwithstanding their reduced significance, seals are still used on contracts, usually in the impression on paper form.
Legal significance in contract law
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 that a seal could be considered an alternative form. A seal was not per se a type of consideration, but rather raised a presumption of consideration (courts have varied in their opinions of whether this presumption was rebuttable). See, e.g., Marine Contractors Co. Inc. v. Hurley, 365 Mass. 280, 285-86 (1974).
The rationale for this special treatment of sealed contracts can be understood in terms of the legal formalities that are associated with sealing a document with a wax seal. Firstly, the following of the legal formality of affixing a seal to a document was evidence of the existence of a contract. Secondly, the need to use a seal – widely known to have legal significance – served to impress upon the parties the significance of the agreement being made. This element of deliberation is important in the context of many legal theories for why donative promises are not generally enforceable in the same way as contracts: there is a concern that donative promises are sometimes made under pressure (for example, from family members) without adequate deliberation, which explains why a requirement for the legal formality of the seal might substitute for consideration to give enforceability to donative promises. Thirdly, the following of the legal formalities through the use of a seal demonstrated beyond doubt that a legal transaction was intended by the parties.
In addition to these three abstract reasons, there may also have been a more practical reason, namely that the object used to imprint the wax, usually an engraved signet ring, identified its owner, thereby providing evidence that the owner of the seal was party to the contract.
Besides substituting for consideration, other consequences of the seal that, at least historically, have held include: even payment did not discharge a sealed contract, if the instrument itself was not physically destroyed. fraud was not permitted as a defence to a sealed contract subsequent modifications to a sealed contract were not binding except where the modifications were also under seal. a principal not designated as such in the contract (undisclosed principal) could not be connected to the contract if it was sealed. an instrument under seal may also enjoy a longer statute of limitations within which it may be enforced.
Position in different jurisdictions
England and Wales
In England and Wales, the common law courts originally recognised only wax seals, but this requirement was gradually relaxed. By the 20th century a small circle of red adhesive paper affixed to the document in question was sufficient when an individual had to use a seal (most commonly on a contract for the sale of land), although the courts also held that a circle containing the letters "L.S." was adequate.
The common law rule which required that a deed made by a private individual had to be sealed to be validly executed was finally abolished in 1989 by the Law of Property (Miscellaneous Provisions) Act 1989. The Act implemented recommendations made by the Law Commission of England and Wales in their 1987 report Deeds and Escrows and replaced seals with the requirements that the document had to explicitly state that it was being executed as a deed, and had to be witnessed.