Have you ever signed a contract that says SEAL after your name on the signature line and not known what that meant? Under Georgia law, a contract under seal has a 20 year statute of limitations (the time that the other side has to file a lawsuit against you under the law). [See O.C.G.A. §9-3-23]. In other states, the time periods may be longer or shorter, but in general you have a longer statute of limitations for a contract signed under seal than a contract that is not under seal. This means if you default on a loan under seal, the creditor would have 20 years to sue you on the debt! Consider a “regular” contract is limited by a six year statute of limitations. It’s really a wonder why every contract doesn’t attempt to include the appropriate language to be a contract “under seal”!
Let’s examine what makes a contract a contract under seal. Generally, the word “seal” has to be in the body of the document, or the end of the signature line must include “(SEAL)” or “(L.S.)”. In most contracts where the writing is included in the body of the document, we usually see language such as “singed under hand and seal” in one of the last few lines of the contract, usually just above the signature line, though it may be possible to include the language elsewhere in the contract. As stated, when on the signature line it must say SEAL or LS at the end of the signature line. Only recently did I learn of the “L.S.” designation myself, which may make it a more powerful way to place a document under seal, as it does not use the word “seal” and thus someone with a basic knowledge of contracts may not realize they have signed the contract under seal.
Some good general advice that ties in well with this subject is if you are presented a contract and do not understand the meaning of some word, letters, or phrase, either get proper legal advice, or cross out the confusing language and see if the other side will still accept the contract without the language in the contract.
What is the bottom line? While a creditor only has six years to sue on a contract in Georgia, if the contract is under seal, this time limit is extended to twenty years.