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  4. Commission rounds off work on contract law with final report

Commission rounds off work on contract law with final report

29th March 2018

A comprehensive report on contract law in Scotland has been published by the Scottish Law Commission today, at the conclusion of its project on the subject.

Its 242 page review of the law, aimed at ensuring that contract law is clear, accessible and fit for the modern age, covers formation, interpretation, remedies for breach and penalty clauses. It concludes that some parts of contract law are unclear, sometimes difficult to find and in need of modernisation.

After consulted widely and examining the law in other parts of the world, in particular the European code the Draft Common Frame of Reference, the Commission makes 35 recommendations, among the main ones being:

  • There should be a new statutory statement setting out the rules on formation of contract. This will make clear key points such as when communications between people making contracts take effect (this is important when so much business is now done by email).
  • Abolition of the postal acceptance rule, under which a contract is formed when an acceptance of an offer is put in the post, as opposed to received). This dates from the 19th century and is out of step with modern business.
  • Remedies for breach of contract should be reshaped. The idea is to improve ways of encouraging people to sort out disputes themselves, rather than ending up in court or having to terminate their contract altogether.

In its introduction the Commission states that its aim has been "to produce rules that are as clear and certain as they can be made in a form that is comparatively accessible to lawyer and layperson alike, that is, in statute". It has also had regard to the views of commercial lawyers that Scots law should not diverge too far from English law – which means avoiding unnecessary costs, including where these might be imposed by English rules, rather than ensuring that Scots law is always aligned with English law.

Professor Hector MacQueen, the lead commissioner on this project, commented: "I believe that when implemented this report will do much to remove current uncertainties as well as simplifying and modernising the law. It will also make the law on formation of contract more accessible than ever before to lawyers and non-lawyers alike."

The report contains a draft bill which would put into effect the Commission's recommendations. 

Click here to access the report.

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