Annapolis, MD asked in Contracts for Maryland

Q: Is there any restriction for a business asking a customer to sign a "Confessed Judgment" agreement in lieu of going

...to District Court for Small Claims complaint?

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1 Lawyer Answer
Mark Oakley
Mark Oakley
Answered
  • Rockville, MD
  • Licensed in Maryland

A: Depends on the nature of the business/service or product. There are various consumer regulatory statutes that govern specific types of businesses, such as home improvements, consumer loans, etc. Some of those statutes impose restrictions on confessed judgments, as well as a grant of a lien on real property. Other types of transactions do not have these restrictions. So, there is no one-answer-fits-all circumstances, and your question fails to describe anything about the transaction involved. If there is a sale subject to payments and a promissory note reflecting the debt obligation, generally these types of notes have confessed judgment language, and they are upheld, subject to special statutory restrictions as mentioned.

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