Signatures

• Jurisdiction: Maryland

III. Signatures

A. In General

Except as required by statute, contracts do not have to be in writing to be binding; hence it is obvious, at least as a general rule, that a signature is not required to bind the parties to an agreement. This book is about written contracts, however, and written contracts typically call for the signature of each party.

Even a written contract may not have to be signed to be valid. Collegiate Poster Network was an Illinois marketing company that conducted solicitations on college campuses. In 1990, Collegiate met with representatives of Signet Bank to discuss the possible distribution of Signet materials by Collegiate. Pursuant to these discussions, Collegiate drafted an agreement, had it signed by Colegiate's president, and sent it to Signet. Signet never signed the agreement, but the parties entered into the relationship contemplated by its terms. The U.S. District Court for the Nothern District of Illinois found that the agreement constituted a binding contract and that, although Signet did not sign the agreement, its conduct established assent to its terms.¹³⁴

Contracts falling under the Statute of Frauds are required to be in writing. As discussed in Chapter 2, in Maryland the concepts embodied by the historical Statute of Frauds are scattered throughout the Annotated Code of Maryland. Courts and Judicial Proceedings II § 5-901 (2013 & Supp. 2019) (hereinafter Cts. & Jud. Proc. § ___) provides:

Unless a contract or agreement upon which an action is brought, or some memorandum or note of it, is in writing and signed by the party to be charged or another person lawfully authorized by that party, an action may not be brought:

(1) To charge a defendant on any special promise to answer for the debt, default, or miscarriage of another person;

(2) To charge any person on any agreement made on consideration of marriage; or

(3) On any agreement that is not to be performed within 1 year from the making of the agreement.

Com. Law I § 2-201 provides:

(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten days after it is received.

(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable

(a) If the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

(b) If the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or

(c) With respect to goods for which payment has been made and accepted or which have been received and accepted (§ 2-606).

Est. & Trusts § 8-109(i) provides:

(i) Statute of frauds.—No action shall be brought to charge a personal representative upon any special promise to answer damages out of his own estate, unless the contract or agreement upon which the action is brought, or some memorandum or note of it, is in writing and signed by the party to be charged, or some other person lawfully authorized by him.

There are other provisions in Maryland law requiring a written contract as well. Pursuant to Bus. Reg. § 6-501, an agreement between a charitable organization and a fund-raising counsel or professional solicitor, and any subcontract or other contract in furtherance of such an agreement must be in writing. Other agreements statutorily required to be in writing include contracts for the sale of business opportunities¹³⁵ under Title 14 of the Business Regulations Article; retail credit accounts under Com. Law II § 12-503; layaway agreements under Com. Law III § 14-1102; contracts providing for a share of growing crops reserved as rent in certain counties under Md. Code Ann., Real Property § 8-115 (2015 & Supp. 2019) (hereinafter Real Prop. § ___); contracts to build custom homes under Real Prop. § 10-505; and home improvement contracts under Bus. Reg. § 8-501.

Under the Maryland statute, every land installment contract must be evidenced by a contract signed by all parties to it and must contain all the terms to which they have agreed. Until the purchaser signs a land installment contract and receives a copy signed by the vendor, the purchaser has an unconditional right to cancel the contract and to receive immediate refund of all payments and deposits made on account of or in contemplation of the contract.¹³⁶ Just above the signature of the purchaser on a land installment contract, the contract must contain, in boldface 12 point type or larger, the following statement: "You are entitled to a copy of this contract at the time you sign it." In the same type, just beneath the purchaser's signature, the following statement must be included: "In the event of default, the purchaser may be liable to a default judgment."¹³⁷ Prior to the execution of any contract for the sale of a new home in Maryland, the seller or builder must provide the purchaser with a copy of the new home disclosure form developed by the Division of Consumer Protection of the Office of the Attorney General and obtain the purchaser's signature certifying that the purchaser has received the disclosure form.¹³⁸

The universally accepted requirement of the Statute of Frauds is a written memorandum signed by the party to be charged (i.e., the party against whom enforcement is sought).¹³⁹ The Court of Appeals has specifically stated that a contract falling under the Statute of Frauds must contain the names of the parties, set forth the contract's terms and conditions, describe the subject matter of the contract, and be signed by the party to be charged.¹⁴⁰

The signature requirement, however, requires little formality. It does not even have to technically qualify as what most of us would consider a signature. A "signature" is sufficient if it is "any symbol made or adopted with an intention, actual or apparent, to authenticate the writing as that of the signer."¹⁴¹

Signatures themselves may be specifically required by statute, as with home improvement contracts, with respect to which Bus. Reg. § 8-501 provides that, before the performance of a home improvement begins, the owner shall be given a copy of the home improvement contract signed by the contractor. Another statutory provision requiring contract signatures is Bus. Reg. § 5-704(b), which requires that a preneed burial contract be dated and executed in duplicate by both the buyer and seller.

In addition to signatures, some provisions of a contract should be separately initialed. Certainly any physical changes to the text of the contract should be separately initialed by both parties so as to avoid subsequent disputes as to the agreed upon language. The drafter may want to consider providing for the initialing of individual provisions that are of particular importance, especially language that is statu-torily required to be "conspicuous" (see "Conspicuous Language Requirements" in Chapter 1). Separate initials may even be required by statute. For example, the Maryland statutory law provides that the notice that must be contained in a home improvement contract regarding liens against the property also provides that this notice must be independently initialed by the homeowner.¹⁴²

Drafting Tip

Provide a space for separate initialing of all provisions which are required by law to be "conspicuous." A party who separately initials a provision will be hard-pressed to later argue that the language was not sufficiently conspicuous, even if the typesetting, etc. is technically deficient.

B. Acknowledgments

Sometimes a contract or other document will require that an agreement be "signed and acknowledged."¹⁴³ Many lawyers seem to think that "sign" and "acknowledge" are synonymous, and, for the most part, they are correct. Technically, to acknowledge something is to recognize it as one's own act. An acknowledgment, therefore, is a declaration that something is genuine.

There is no required manner of acknowledging a contract. Corporate law defines acknowledgment as a statement to the effect that the individual signing the document acknowledges it to be his or her own act (or the act of the entity for which they are acting).¹⁴⁴ Thus, acknowledgment is accomplished merely by inserting a statement above one's signature to the effect that the signer is acknowledging the agreement as his or her own act (or the act of the entity for which they are acting).

The corporate law distinguished acknowledgment from "verification," the latter of which is done under oath. Under the Maryland Uniform Acknowledgments Act, the acknowledgment of any instrument (including a contract) is a sworn statement made before a judge, master, clerk of the court, or notary public.¹⁴⁵ It is unlikely, however, that a drafter who uses the term "acknowledge" actually intends to require a signing under...