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Tag: contract law

‘My Hands Are Tied’: Unilateral Variation of the Contract of Employment

by David Cabrelli, Professor of Labour Law, University of Edinburgh

Should the law lend legal validity to a clause in a contract that empowers one of the parties to unilaterally vary its terms? And should there be any difference in the applicable rule if the contracting party who has the power to vary is in a superior bargaining position, such as an employer in an employment contract? These are the two principal questions that this post will consider.

In the view of John Stuart Mill, everyone should have the right to consent (or not to consent) to change their mind in the future and to have that position respected by the law.[1] Up to a point, Mill’s position reflects the current law, since the point of departure is that contracts can only be varied by mutual consent, irrespective of whether the bargain concluded is a commercial contract[2] or employment contract.[3] However, there is an exception. For example, in the case of a unilateral variation clause – where the employee has exercised their autonomy to agree to a provision that permits the employer to change the terms of the contract of employment without the approval of the employee – contract law recognises that mutual consent is superfluous.[4] This is controversial for the reason that the employee is in an unequal bargaining position vis-à-vis the employer as well as subordinate to the employer and subject to the latter’s commands. Thus, there is the temptation to reform the law to invalidate unilateral variation clauses. But in this post, I make the claim that this temptation should be resisted, albeit not as a matter of principle, but for doctrinal reasons.

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James Wood of Wallhouse and the Law of Contractual Misrepresentation: Woods v Tulloch (1893)

by Professor Hector MacQueen, Emeritus Professor of Private Law, Edinburgh Law School*

Back in 2012 I was honoured to be asked to deliver that year’s James Wood Memorial Lecture in Glasgow University Law School. My title was “Private Law, National Identity and the Case of Scotland”. But I thought that before I started on the substance, I should say a few words about James Wood. No previous lecturer appeared to have done so and before the invitation I did not know anything about him. The life and remarkable business career of James Wood of Wallhouse in Torphichen, West Lothian are however well set out in the Dictionary of Scottish Business Biography.[1]  Born in Paisley in 1840, from his early 20s he was a coal merchant and mine-owner around the greater Glasgow area. In 1871 Wood expanded his mining interests into, first, Armadale (West Lothian) and then other places in the county such as Bathgate. His business activities in the area extended in due course to gas, brickworks, steel works and the shale oil industry as well as coal-mining. The business, which was run in partnership with his brother William, came to have offices in London and New York, as well as Glasgow. William looked after sales and merchanting while James concentrated on colliery development and operations. Having been chairman of the Pumpherston Shale Oil Company from the mid-1880s, James became a more or less professional company director after 1900, working in a wide variety of Scottish companies. As his biographer remarks, “his experience and expertise in the business world made him a much sought-after figure to serve on company boards.”

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What evidence can be taken into account in interpreting a contract? Prohibiting reference to pre-contractual negotiations and the effect of an entire agreement clause

by Ms Lorna Richardson, Senior Lecturer in Commercial Law

Scots law, like English law, generally prohibits the use of pre-contractual negotiations when interpreting a contract. This is in contrast to the position in many civilian systems where such negotiations are taken into account in determining what a contract means. The DCFR also permits reference to pre-contractual negotiations, as part of the circumstances in which the contract was entered into, when interpreting a contract (Art II-8:102(1)). The exclusion of such evidence in Scots law is not however absolute and it can be referred to in certain circumstances, for instance, to show that a fact was known to both parties at the time of contract formation, such fact forming part of the “factual matrix” against which the words of the contract must be considered.

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Formation of Contract in Scots Law: Applying the Governing Principles

by Laura Macgregor, Professor of Scots Law, University of Edinburgh.

Many types of contracts do not require to be entered into in writing in Scots law (see Requirements of Writing (Scotland) Act 1995, s1). Where this is the case, it can be difficult to identify whether the parties have reached binding consensus or something short of that. It is possible for parties to reach consensus on all essential terms, and yet agree that they will not be contractually bound until such time as a written contract is signed (Karoulias SA v The Drambuie Liqueur Company Ltd 2005 SLT 813). In Supaseal Glass Ltd v Inverclyde Windows Manufacturing Ltd ([2022] CSOH 49), a recent case decided in the Outer House of the Court of Session, Lord Braid provides a useful summary of the governing principles of formation of contract in Scots law. His objective analysis nicely illustrates Lord President Dunedin’s famous statement that “[c]ommercial contracts cannot be arranged by what people think in their inmost minds. Commercial contracts are made according to what people say” (Muirhead and Turnbull v Dickson (1905) 7F 686 at 694).

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The Covid Pandemic 2020-2022 and Scottish Contract Law

By Hector MacQueen, Emeritus Professor of Private Law, University of Edinburgh

If one looks back at previous pandemics, such as the so-called “Spanish influenza” of 1918-19, through the lens of the law reports, the most striking finding is an almost complete lack of cases in Scotland (or elsewhere in the United Kingdom), despite the lack of any legislative response at all from a central government yet to assume much responsibility for public health. The only possible Scottish case about Spanish influenza thrown up by a Westlaw search for “influenza” between 1918 and 1925 was McKeating v Frame 1921 SC 382, which concerned an employer’s liability for the death of a female farm servant aged 17 who collapsed with double pneumonia and influenza while at work in March 1919 whereupon the employer sent her without any support to her mother’s home several miles away, travelling on foot and by bus; she died two days later. The first instance decision that the employer had no liability in these circumstances was fortunately over-turned by the Second Division.

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