Opinion
No. 485504
June 29, 2005
MEMORANDUM OF DECISION
This is an action for breach of a written contract. The defendant is a Massachusetts corporation and the contract's choice of law provision designates Massachusetts as the governing jurisdiction. The defendant has moved for summary judgment on the basis that the contract is unenforceable because the only consideration given by the plaintiffs for the defendant's promises contained therein was past consideration. Under the law of Massachusetts, as with most jurisdictions, past consideration is not valid consideration. Swartz v. Lieberman, 323 Mass. 109, 112, 80 N.E.2d 5 (1948).
However, under Massachusetts law, a seal imports consideration. Newburyport Society for Relief of Aged Woman v. Noyes, 287 Mass. 530, 533, 192 N.E. 54 (1934). While the contract here is not under a seal, it states that it "shall take effect as a sealed instrument." At oral argument, the court apprised counsel that Mass. Gen. Laws ch. 4, § 9A (2005) provides, inter alia: "In any written instrument, a recital . . . that such instrument is intended to take effect as a sealed instrument, shall be sufficient to give such instrument the legal effect of a sealed instrument without the addition of any seal . . ." Procedurally, "[i]t would be plain error for this court to ignore a clearly applicable statute." Republic Ins. Co. v. Pat DiNardo Auto Sales, Inc., 44 Conn.Sup. 207, 211, 678 A.2d 516 (1995), aff'd, 41 Conn.App. 686, 677 A.2d 21, cert. denied, 239 Conn. 906, 682 A.2d 1005 (1996).
Mass. Gen. Laws ch. 4, § 9A (2005) provides in its entirety: "In any written instrument, a recital that such instrument is sealed by or bears the seal of the person signing the same or is given under the hand and seal of the person signing the same, or that such instrument is intended to take effect as a sealed instrument, shall be sufficient to give such instrument the legal effect of a sealed instrument without the addition of any seal of wax, paper or other substance or any semblance of a seal, by scroll, impression or otherwise; but the foregoing shall not apply in any case where the seal of a court, public office or public officer is expressly required by the constitution or by statute to be affixed to a paper, nor shall it apply in the case of certificates of stock of corporations. The word 'person' as used in this section shall include a corporation, association, trust or partnership."
After apprising counsel of the Massachusetts statute, the court recessed in order to afford counsel time to consider the effect of the statute.
The defendant has responded that the rule that a sealed contract imports consideration has been sharply criticized by the Massachusetts Supreme Judicial Court and eliminated by that court in some circumstances. For example, prior to 1975, the rule in Massachusetts was that an undisclosed principal may, upon proof of his existence and identity, be held liable on an unsealed contract made on his behalf by his agent, but may not be held liable on a sealed contract. Exchange Realty Co. v. Bines, 302 Mass. 93, 98-99, 18 N.E.2d 425 (1939); Seretto v. Schell, 247 Mass. 173, 176, 141 N.E. 871 (1923). Nalbandian v. Hanson Restaurant Lounge, Inc., 369 Mass. 150, 338 N.E.2d 335 (1975), the court abolished the distinction between sealed and unsealed instruments in this context. More recently, in Knott v. Racicot, 442 Mass. 314, 812 N.E.2d 1207 (2004), the court concluded that "no sound legal justification exists for maintaining the common-law fiction that an option contract executed under seal conclusively imports consideration . . ." Id., 315.
In both Nalbandian and Knott, however, the court stopped short of abolishing wholesale the common-law rule that a seal imports consideration. See Nalbandian v. Hanson Restaurant Lounge, Inc., supra, 369 Mass. 153; Knott v. Racicot, supra, 442 Mass. 323 n. 14. In Knott, the court stated: "Should the appropriate case present itself to us in the future, we would consider a request to substantially modify or abrogate the conclusive presumption of consideration for other types of sealed contracts, to the extent the Legislature has not directed otherwise." Knott v. Racicot, supra, 442 Mass. 323 n. 14. Until then, the general rule in Massachusetts is that a contract under seal requires no consideration. This court is duty bound to apply that rule, as extended by Mass. Gen. Laws ch. 4, § 9A (2005). Since the contract between the parties states that it "shall take effect as a sealed instrument," under Massachusetts law, no consideration was required. For this reason, the defendant's motion for summary judgment is denied.
BY THE COURT
Bruce L. Levin. Judge of the Superior Court.