Court Opinion

ID: 9748197
Source: CourtListenerOpinion
Date Created: 2023-08-27 15:54:39.733525+00
Date Added: 2024-06-11T07:25:32.495772
License: Public Domain

JACOBS, Justice,
dissenting.
The majority opinion commendably and quite accurately highlights the confusion in our case law on the question of what constitutes an instrument under seal (sometimes referred to as a “specialty contract”). That question would ordinarily be of interest mostly to antiquarians, but for the unique (and, in my view, unfortunate) consequence of being deemed a “specialty contract.” For ordinary (la, non-specialty) contracts, the applicable statute of limitations is three years.54 But, for a contract under seal, there is no statute of limitations; instead, a twenty-year limitations period has traditionally been imposed as a matter of common law.55 That is why the issue of what precisely must be shown for an instrument to be considered “under seal” matters significantly.
In this case, the only evidence that the contracting parties intended to create a sealed instrument is that the word “seal” appears next to the signature line. The question is whether that, without more, (such as, for example, a testimonium or similar express recital that the parties intend for the contract to be under seal) is sufficient evidence of intent to create a specialty instrument. The Court of Chancery held it is not. The majority holds that it is. In my opinion, the majority’s rule represents an inadvisable policy choice that would frustrate the reasonable expectations of parties to many commercial contracts. I must therefore dissent.
Sealed instruments are an artifact of a period of history that has, by and large, long passed into obscurity. During that earlier period, a seal was a symbol well-*15understood in commerce as intended to confer solemnity upon a contract involving contractual transactions historically thought to be of significance and tending to be of long duration. The original, paradigmatic “specialty” instruments — deeds and mortgages — were of this character. Given their nature, there was a rough congruence between the duration of those instruments and the twenty-year limitations period governing their enforcement.
Had the category of “specialty instruments” been restricted to deeds, mortgages, and similar instruments memorializing transactions in land, the issue of what evidence suffices to constitute a “sealed instrument” would likely be of little moment. What gave life to the issue were efforts to broaden this category to include conventional commercial instruments involving non-land related transactions with far shorter time horizons, such as (for example) promissory notes,56 construction contracts,57 and franchise contracts58 wherein the word “seal” was printed next to the parties’ signature line. In today’s modern commercial environment, it becomes more difficult in such cases to presume that the placement of the (often preprinted) word “seal” next to the contracting parties’ signature line conclusively evidences that the parties intend to subject themselves to contract-based litigation for twenty years, rather than the normal three year period. Understandably, for that reason there developed conflicting Superior Court authority requiring additional evidence that parties to conventional commercial agreements actually intended that result, before imposing upon them the dramatic consequence of according their contract “specialty” status.59
As the majority correctly notes, the legislatures of several states have resolved this problem, either by abolishing the seal entirely, or by prescribing what kind of evidence will suffice for a contract to be an instrument under seal. Unfortunately, in Delaware the General Assembly has not provided guidance in this area.
The majority acknowledges the conflict in our case law, but has resolved that conflict in favor of a rule that “the word ‘seal’ next to a signature is all that is necessary to create a ‘sealed’ instrument, ‘irrespective of whether there is any indication in the body of the obligation itself that it was intended to be a sealed instrument.’ ” The majority favors this rule because it “provides a bright line standard that is easily applied.” Concededly, their rule does that. My difficulty, however, is that ease of application is not the only *16policy at stake here. Also at stake is the policy that underlies all statutes of limitations: creating a period of repose from litigation after a prescribed period of time. That policy, in my view, deserves greater weight where the dispute involves contracts other than the historic, paradigmatic instruments (deeds and mortgages) to which the common law twenty-year limitations period originally was applied.
To state it more plainly, in today’s modern commercial environment, it is unreasonable and (I submit) an inadvisable policy to subject parties to commercial contracts to the risk of litigation for twenty years without requiring at least minimally persuasive evidence that the parties intended that result. In my view, the common law rule should be that the use of the boilerplate term “seal,” without more, should be insufficient to visit twenty years of exposure to litigation upon contracting parties. I therefore would affirm the judgment of the Court of Chancery, and respectfully dissent.

. 10 Del. C. § 8106.

. See cases cited at n. 21, supra.

. In re Beyea's Estate, 15 A.2d 177 (Del.Orphan's Ct.1940).

. Peninsula Methodist Homes and Hosps. Inc. v. Architect’s Studio, Inc., 1985 WL 634831 (Del.Super.Ct. Aug. 28, 1985) (involving a contract to waterproof a balcony); Consol. Rail Corp. v. Liberty Mutual Ins. Co., 2002 WL 32080503 (Del.Super.Ct. Sept. 6, 2002).

. Kirkwood Kin Corp. v. Dunkin’ Donuts, Inc. 1995 WL 411319 (Del.Super.Ct. June 30, 1995).

. Am. Tel. & Telegraph Co. v. Harris Corp., 1993 WL 401864 (Del.Super.Ct. Sept.9, 1993) (holding that the presence of corporate seals and the word "seal" on the signature page of license agreement were legally insufficient to render the agreement a specialty contract); Peninsula Methodist Homes and Hosps., Inc. v. Architect’s Studio, Inc., 1985 WL 634831, at *1-2 (holding that the testimonium reciting that “In witness whereof, the parties have hereunto set their hands and seals, the day and year first above written” was sufficient additional evidence that the parties intended to create a contract under seal); contra Kirkwood Kin Corp. v. Dunkin’ Donuts, Inc., 1995 WL 411319 (holding that the mere presence of a seal and a testimonium clause not sufficient to create a sealed instrument); Consol. Rail Corp. v. Liberty Mutual Ins. Co., 2002 WL 32080503 (same).