Hostages, Wax Seals, Handshakes, and the Deal You Didn’t Know You Made
The law has spent three thousand years answering one question: which promises count? The answers, hostages, seals, peppercorns, and reliance, still decide construction cases today, including whether you were bound before you ever signed.
By M. Colby Lewis, Construction Defect Attorney, The Law Offices of Colby Lewis, Houston, Texas
This is Post 4 in our Foundations Series, a plain-English walk through the foundations of construction law for building owners. Post 3, What Is Construction Law?, mapped the six bodies of law in every construction case and noted that all of them orbit the contract. This post is about the moment a contract comes into being, which is earlier than most owners think.
The short version
A contract is simply a promise the law will enforce, and the law has always demanded proof that you really meant to be bound. That proof has evolved: ancient law took hostages, medieval law took wax seals, the common law demanded “consideration,” a bargained-for exchange, and modern law reads your intent from the whole context, including what you did before anything was signed. Two consequences matter enormously for building owners. First, a signed writing is powerful: courts presume it was supported by consideration and will enforce even a bad bargain. Second, and more dangerous, you can be bound without a signed contract, through promises someone relied on, work you allowed to start, or an “informal” deal the law treats as fully formed. The signature line is not where the commitment starts.
What Is a Contract, Really?
A contract is a promise, or a set of promises, that the law will enforce. The American Law Institute’s formal definition says the same thing with more words: a promise “for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.” And a promise, in turn, is a “manifestation of intention” to act or not act, made in a way that justifies the other person in understanding that a commitment has been made. Restatement (Second) of Contracts §§ 1, 2.
Notice what is not in those definitions: no signature, no notary, no thick stack of paper. The paper is evidence of the deal, not the deal itself. From the beginning, the law of contract has really been about two questions. Did you manifest an intent to be bound? And what happens when the promise is broken? Societies started enforcing private promises for a blunt reason: it preserves civil peace. If the law will make the promise good, nobody has to make it good with a feud.
Before Signatures: Hostages, Wax Seals, and the Original Handshake
How do you prove a promise was serious? Ancient law had a direct answer: leave a hostage. Oliver Wendell Holmes, Jr., tracing the history in The Common Law, put it flatly: “the surety of ancient law was a hostage.” A defendant in early English law “must either find security or go to prison.” Over time, legal historians tell us, the hostage was replaced by a surety who assumed personal liability, the pledge of valuable goods gave way to symbolic pledges, and eventually the debtor was allowed to serve as his own hostage. The old formalities were then supplanted by new ones, including “the spoken pledge of faith and the proffering of the right hand.”
Read that last phrase again. The handshake deal is not folk custom; it is a surviving legal formality, the direct successor of the hostage and the pledge. And here is a connection worth savoring if you read Post 3: the surety bond that guarantees your contractor’s performance today is the direct descendant of the hostage. The surety still stands in as the body answerable for someone else’s promise. The law just stopped requiring the body.
Writing came next, and with it the wax seal. Holmes explained the logic: a writing’s weak point was proving it was really the defendant’s, and that problem “disappeared as soon as the use of seals became common.” Produce the document, match the wax impression to your opponent’s seal, done. Sealed contracts were so solemn that the law rewarded them with dramatically longer periods in which to sue.
IN PLAIN ENGLISH, FROM COLBY
Here’s the deal, and I mean that literally. For most of human history, the question wasn’t “did you sign?” It was “what did you put up?” A hostage. Your goods. Your seal pressed in wax. Your right hand in another man’s grip, in front of witnesses. Every one of those was the same idea: proof you meant it. Now think about your project. The performance bond behind your contractor? That’s the hostage, right? The surety is standing in, saying “if he doesn’t perform, take it out of me.” Thousands of years of legal engineering, and the job hasn’t changed: make the promise expensive to break. Which brings up the question that should keep you up at night: on your project, what did the other side actually put up? If the answer is “a signature and a smile,” you’d better know what that signature is worth.
The Consideration Rule: Why 99 Promises Out of 100 Weren’t Binding
The common law’s great filter was “consideration,” the requirement of a bargained-for exchange. Holmes stated the rule in 1881: “Ninety-nine promises out of a hundred, by word of mouth or simple writing, are not binding unless there is a consideration for them,” meaning the promisee either conferred a benefit or incurred a detriment as the inducement for the promise. A naked promise of a gift, the law would not touch. A promise paid for, the law would enforce.
Then the filter dissolved. Over the twentieth century, courts diluted consideration to the point that legal scholars describe it with a famous image: even a “peppercorn” will do. Any nominal exchange suffices. And for signed documents, the question has nearly vanished: as one federal court summarized the modern rule, “consideration is presumed when an agreement sought to be enforced is in writing and signed by the party to be bound.” MidAmerican Energy Co. v. Great American Ins. Co., 171 F. Supp. 2d 835 (N.D. Iowa 2001).
For a building owner, that presumption cuts in both directions. It means the contract you signed will be enforced without anyone quibbling over what was exchanged. It also means the change order you signed under pressure, the lien waiver you signed at closing, and the one-sided amendment you signed to keep the job moving are all presumptively binding too. The law long ago stopped asking whether you got a good deal. It asks whether you signed.
Can an Ancient Formality Still Kill a Modern Claim?
Yes, and recent cases prove the old machinery still has teeth. In Virginia, a landlord and tenant operated for years under a fifteen-year lease that everyone treated as valid, until the Supreme Court of Virginia held the lease unenforceable as a matter of law because it lacked the common-law formality of a seal or any statutory substitute. The Game Place, L.L.C. v. Fredericksburg 35, LLC, 813 S.E.2d 312 (Va. 2018). A wax-seal rule with medieval roots dissolved a modern commercial lease.
Maryland’s highest court went the other way on similar facts, with an equally sharp lesson. Two corporations had affixed their corporate seals to a design-build contract. When a dispute arose, the question was whether the contract qualified for the twelve-year period allowed for sealed contracts or the three-year period for unsealed ones. The court held the contract unsealed, reasoning that stamping a corporate seal “merely demonstrates authority to sign a contract” rather than an intent to invoke the longer period, and the claim’s window shrank from twelve years to three. Rouse-Teachers Properties, Inc. v. Maryland Cas. Co., 750 A.2d 1281 (Md. 2000).
Same ancient formality, opposite outcomes, and in both cases the parties learned what it meant years after signing. That is the enduring truth about contract formalities: they are invisible right up until they decide the case.
IN PLAIN ENGLISH, FROM COLBY
You want to know why lawyers obsess over boilerplate? Those two cases are why. A company in Virginia lost a fifteen-year lease, not because of what the lease said, but because of a formality older than the printing press that nobody in the room had thought about since law school. And in Maryland, the difference between having twelve years to sue and having three came down to what a rubber stamp legally meant. Twelve years versus three, on the same facts. Now, when your builder slides a contract across the table and says “it’s all standard language, don’t worry about it,” I want you to hear those two cases. The standard language is exactly where cases are won and lost. Nobody ever lost a building over the paragraph they argued about, they lose it over the paragraph nobody read.
Freedom of Contract Meets Fairness: Will a Court Save You From a Bad Deal?
Usually not, and owners need to hear that clearly. The nineteenth century turned “freedom of contract” into something close to a religion. Roscoe Pound traced the idea from Adam Smith’s laissez-faire economics through the English individualists, and delivered the famous verdict on what happened: “They adopted it as a means, and made it an end.” The law’s default has been stable ever since. As the first reporter for the Second Restatement of Contracts put it, the governing principle is that “bargains are enforceable unless some other principle conflicts.”
The twentieth century did build safety valves into the machine: unconscionability doctrine for bargains so lopsided they shock the conscience, good-faith obligations, and a growing layer of statutes that impose minimum terms no contract can waive. Scholars have argued for fifty years about how far this softening goes; one famously announced “the death of contract,” while others documented its continued vitality. But do not confuse the academic debate with your risk profile. The safety valves are narrow, the default is enforcement, and a court’s sympathy is not a remedy. The time to fix a one-sided construction contract is before your signature manifests your intent, not after.
Can You Be Bound Without a Signed Contract?
Yes, and this is the trap that catches sophisticated owners. Modern law reads intent from the surrounding circumstances, the whole context of the parties’ dealings, not just from executed documents. Two doctrines do most of the work.
Implied contracts. When parties behave like they have a deal, performing, accepting work, paying invoices, the law can find a contract implied from conduct, and can order payment of the reasonable value of work performed even where no express agreement exists.
Promissory estoppel. Under Restatement (Second) of Contracts § 90, a promise that the promisor should reasonably expect to induce reliance, and that does induce it, can be enforced to prevent injustice, no consideration, no signature, no formal contract required.
Now map those doctrines onto how construction deals actually happen. A letter of intent issued “while the lawyers finish the paperwork.” A notice to proceed. An email saying “go ahead and order the steel, we’re good.” Mobilization on site before execution. Every one of those is a manifestation of intent that someone else will rely on, and reliance is exactly what these doctrines enforce. The commitment does not wait politely for the signature block.
IN PLAIN ENGLISH, FROM COLBY
Remember how I ended the last post: don’t get married before you mean to propose. This is the section I was warning you about. I’ve seen it over and over. The owner thinks, “we haven’t signed anything, I’m still free.” Meanwhile the contractor has mobilized, ordered materials, turned down other work, all because somebody on the owner’s team said “you’re our guy, get started.” You know what a court can call that? A deal. Words plus reliance can equal a contract, and it works in reverse too, the builder’s promises to you before signing can bind him. So here’s the rule, and it’s simple. Treat every “go ahead” like a signature, because the law might. If you’re not ready to be bound, say so in writing: “no agreement exists until both parties execute a written contract.” One sentence. It’s the cheapest protection you’ll ever buy.
What This Means for a Texas Building Owner
Three points to carry out of this history. First, your signature is a commitment the law takes almost absolutely seriously. Consideration is presumed, bad bargains are enforced, and the safety valves are narrow. Negotiate before you sign; the leverage never comes back.
Second, your words and conduct before signing can bind you, and can bind the other side. That cuts both ways: the pre-contract promises a builder made to induce your deal are potential evidence, so preserve the emails, proposals, and meeting notes from before the contract, not just after.
Third, formalities and fine print still decide real cases, from what a seal means to how long you have to sue. In construction defect cases especially, the limitations and repose calendar starts running whether or not you have read your own contract lately. Before a problem arises, or the moment one does, put experienced eyes on the documents. That is the work we do for building owners across Texas, and our Construction Defects FAQ covers the first practical steps.
Key Takeaways
- A contract is any promise the law will enforce, and enforcement has never required a signature, only a “manifestation of intention” to be bound that another party reasonably relies on. Restatement (Second) of Contracts §§ 1, 2.
- The law’s proof-of-commitment devices evolved from hostages to sureties to wax seals to consideration. The modern performance bond is the direct descendant of the ancient hostage, and the handshake began as a formal legal pledge.
- Consideration has shrunk to a “peppercorn,” and courts presume a signed writing is supported by consideration, so signed documents, including change orders and waivers, are presumptively enforceable.
- Ancient formalities still bite: courts have voided a 15-year lease for want of a seal (Game Place, Va. 2018) and cut a claim window from twelve years to three over what a corporate seal meant (Rouse-Teachers, Md. 2000).
- Courts enforce bad bargains. “Bargains are enforceable unless some other principle conflicts” remains the default; unconscionability and similar doctrines are narrow exceptions, not a safety net.
- You can be bound without signing, through implied contracts and promissory estoppel, so letters of intent, notices to proceed, and “go ahead” emails should be treated as seriously as signatures.
Frequently Asked Questions
Is a handshake deal legally binding?
It can be. A contract requires a manifested intent to be bound and (traditionally) an exchange of value, not a signature. Oral agreements are enforceable in many situations, though some categories of contracts, such as those involving interests in real estate or that cannot be performed within one year, generally must be in writing under the statute of frauds. The safer assumption is that a serious spoken commitment may bind you.
What is consideration in a contract?
Consideration is the bargained-for exchange, a benefit to the promisor or detriment to the promisee, that traditionally separated enforceable contracts from unenforceable gift promises. Modern courts require very little (“even a peppercorn”), and when an agreement is in writing and signed, consideration is generally presumed.
Can I be bound by a contract I never signed?
Yes, in two main ways. A contract can be implied from the parties’ conduct, such as allowing work to proceed and accepting its benefits. And under promissory estoppel, a promise you should expect someone to rely on, and they do rely on, can be enforced against you to prevent injustice, even with no signed agreement.
Is a letter of intent binding?
It depends on its language and the parties’ conduct. A letter of intent can be a mere agenda for negotiation, a partially binding agreement, or evidence supporting an implied contract or estoppel claim, especially if work begins or money moves in reliance on it. If you do not intend to be bound, the letter should say so expressly.
Why does it matter whether my construction contract is “formal”?
Because formalities can control real outcomes: how long you have to sue, which terms are enforceable, and whether the agreement is valid at all. Courts have voided or reclassified contracts over formality questions as small as a seal. Having a construction attorney review the documents before signing costs far less than litigating an ambiguity after.
Coming Next in the Foundations Series
Now that we know when a promise hardens into a contract, the next post opens the document itself: the express construction contract. What actually makes up “the contract” on a construction project, when it is one document, when it is a dozen incorporated by reference, and why the answer to “what did we agree to?” is more complicated on a jobsite than anywhere else in business. If you have ever signed a two-page proposal that “incorporated” a hundred pages you never saw, the next post is about you.
The full series lives in our Knowledge Center.
About the Author
- Colby Lewis is a seventh-generation Texan, trial lawyer, and the founder of The Law Offices of Colby Lewis, with offices in Houston, San Antonio, Corpus Christi, McAllen, and Brownsville. Over a two-decade career he has recovered more than $200 million for his clients, including public entities such as Harris County, the Houston Community College system, and dozens of Texas school districts and cities in construction defect and insurance matters. He is AV Preeminent rated by Martindale-Hubbell, has been named a Texas Super Lawyer every year from 2016 through 2026, and was named to the Top 100 Houston Super Lawyers list for 2025 and 2026. He represents building owners, not builders, in construction defect litigation across Texas. Meet Colby, or call (866) 265-2948.
Sources and Authorities
- Restatement (Second) of Contracts §§ 1, 2, 90 (1981)
- Oliver Wendell Holmes, Jr., The Common Law 247-61 (1881); Holmes, The Path of the Law, 10 Harv. L. Rev. 457 (1897)
- MidAmerican Energy Co. v. Great American Ins. Co., 171 F. Supp. 2d 835 (N.D. Iowa 2001)
- The Game Place, L.L.C. v. Fredericksburg 35, LLC, 813 S.E.2d 312 (Va. 2018)
- Rouse-Teachers Properties, Inc. v. Maryland Cas. Co., 750 A.2d 1281 (Md. 2000)
- Roscoe Pound, Liberty of Contract, 18 Yale L.J. 454 (1909)
- Robert Braucher, Freedom of Contract and the Second Restatement, 78 Yale L.J. 598 (1969)
- Grant Gilmore, The Death of Contract (1974); Richard E. Speidel, An Essay on the Reported Death and Continued Vitality of Contract, 27 Stan. L. Rev. 1149 (1975)
- The Past of Promise: An Historical Introduction to Contract, 69 Colum. L. Rev. 576 (1969); Note, The Peppercorn Theory and the Restatement of Contracts, 10 Wm. & Mary L. Rev. 201 (1968)
- Farnsworth on Contracts §§ 1.3-1.4, 2.1-2.19 (2d ed. 1998); Pollock, Principles of Contract (12th ed. 1946)
This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. Whether a particular promise, writing, or course of conduct created a binding contract depends on your facts and current Texas law; consult a licensed Texas attorney about your specific situation. Attorney M. Colby Lewis is responsible for the content of this page. Principal office: Houston, Texas.
