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Tag: Private Law

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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Moveable Transactions (Scotland) Bill

by Andrew Steven, Professor of Property Law, University of Edinburgh.

The Moveable Transactions (Scotland) Bill was introduced to the Scottish Parliament on 25 May. The Scottish Government is therefore implementing the recommendations made by the Scottish Law Commission in its three-volume Report on Moveable Transactions (Scot Law Com No 249, 2017). The Public Finance Minister, Tom Arthur MSP has described the Bill as “vital to helping businesses and the wider economy”.

The report was the culmination of a large project conducted by the Commission. Its Discussion Paper of 2011 (Scot Law Com DP No 151, 2011), on which Professor George Gretton, Lord President Reid Professor of Law Emeritus in Edinburgh Law School was lead Commissioner, was the subject of a symposium by the Edinburgh Centre for Private Law in October 2011. The papers presented were published in the May 2012 issue of the Edinburgh Law Review. Following this symposium and consultation, I was responsible as lead Commissioner for taking the project through to the 2017 Report.  It has a draft Bill annexed to it, on which the Scottish Government Bill is based.  The Bill is arguably the largest reform to Scottish moveable property law since the Sale of Goods Act 1893, although its successor, the Sale of Goods Act 1979, falls outwith scope because of its UK-wide application.

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Unjustified Enrichment in Scots Law: Time for Consolidation, not Reappraisal?*

By Niall Whitty, Honorary Professor of Edinburgh Law School

1. 1961-1990. I must confess I have been fascinated by the Scots law of unjustified enrichment for over 60 years. My first contact with it occurred in autumn 1961 – in my first year at Edinburgh University Law Faculty.[1]

At that time, the English law of restitution, with its imputed contract theory of quasi-contract[2] and its Coronation cases,[3] (rejecting restitution after frustration of contract) was held up to students in the Civil Law class as evidence that the English law of obligations, while rich in detail, was poor in principle. By contrast, Scots enrichment law, with its obediential obligation theory and civilian Cantiere San Rocco case,[4] was said to be much superior as indeed in some respects it plainly was. In the next three decades, however, the condition and status of unjust enrichment in English law was completely transformed,[5] while the Scots law, starved of research and the stimulus of comparative law, tended to stagnate and sometimes took wrong turnings.[6] The reason was not so much complacency as the fact that the academic branch of the Scottish legal profession, though growing, was still relatively small and over-stretched.[7]  Probably more has been written on our enrichment law in the past 30 years than in the previous 300 years.

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The Covid-19 Pandemic, Contracts, and Change of Circumstance: still room for equitable adjustment?

In Lloyds TSB Foundation for Scotland v Lloyds Banking Group plc [2013] UKSC 3, 2013 SC (UKSC) 169, Lord Hope of Craighead uttered the following obiter dictum:

[T]he proposition that the court can equitably adjust a contract on the basis that its performance, while not frustrated, is no longer that which was originally contemplated is not part of Scots law. To hold otherwise would be to undermine the principle enshrined in the maxim pacta sunt servanda which lies at the root of the whole of the law of contract. I see no need for this and, as there is no need for it, I would reject the suggestion that the court should assume that function [para 48].

The Lloyds TSB Foundation case will be discussed further below.  The purpose of this blog entry is to challenge the absoluteness of Lord Hope’s statement and to argue that Scots law can and does recognise the possibility of “equitable adjustment” of contracts to deal with significantly changed circumstances, such as is found in many other legal systems.  Not all the relevant authorities were reviewed in Lord Hope’s judgment.

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Cohabitants, unjustified enrichment, contract and subsidiarity: Pert v McCaffrey

One cheer

The decision of a Court of Five Judges in Pert v McCaffrey [2020] CSIH 5 will raise one cheer from family lawyers.  It over-rules the previous Outer House holding in Courtney’s Executors v Campbell [2016] CSOH 136, 2017 SCLR 387, that the “subsidiarity” of unjustified enrichment entails its non-availability to an ex-cohabitant who has failed at least to seek the remedy available to him or her against their former and still living partner under section 28 of the Family Law (Scotland) Act 2006.  (The ending of cohabitation by death is dealt with under section 29 and is not treated here.)

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