Cameron Miranda
Scottish contract law and English contract law have many similarities, but there are also some key differences that need to be considered when creating legally binding contracts. For example, the terminology differs: in English law, parties to a contract may say they entered into the contract, whereas in Scotland, the correct terminology is subscribed to the contract. Another difference is in the execution of contracts: Scottish law does not require consideration for a contract to be valid, whereas English law does. Understanding these differences is crucial for businesses creating contracts in Scotland, as neglecting the nuances of Scottish contract law could render a document legally invalid.
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What You'll Learn
Terminology differences
Joint Liability
In English law, when multiple parties are 'jointly' liable to make a payment, it is presumed that each party is liable for the full amount. However, in Scots law, joint liability means that each party is liable only for their proportion of the total amount.
Signed vs Subscribed
In English contract law, the term 'signed by' is used, whereas in Scotland, the equivalent term is 'subscribed by'. This is reflected in the phrase ''entered into the contract' in English law, which becomes 'subscribed to the contract' in Scotland.
Signee vs Granter
The term 'signee' in English law refers to the person who signs a contract. In Scotland, this role is known as the 'granter'.
Witnessing vs Self-Proving
English law uses the term 'witnessing' to describe the process of having a third party observe and confirm the signing of a document. In Scotland, this concept is known as 'self-proving', reflecting the Requirements of Writing (Scotland) Act 1995, which outlines the execution requirements for contracts.
Estoppels vs Personal Bar
In English law, the concept of estoppels prevents a party from asserting certain rights. Scotland has a similar concept called 'personal bar', which serves a similar purpose but with some distinct differences.
Consideration
Consideration is a key concept in English contract law, requiring an exchange of value between parties. This means that a contract must involve some form of benefit or detriment to each party, such as money paid for goods or services, or a promise to perform an action. However, in Scotland, consideration is not required for a contract to be valid. This allows for gratuitous contracts, where only one party has duties to the other.
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Contract execution
Scottish contract law and English contract law share many similarities, but there are some key differences in the execution of contracts. These differences must be understood to ensure that contracts are legally valid.
In English law, contracts can be executed in two main ways: as a deed or as a simple contract. A deed requires the presence of a witness, whereas a simple contract does not. A simple contract, or 'contract under hand', is formed through consideration. This means that both parties must bring something to the agreement, and both parties must benefit from it.
In Scotland, the English requirement for consideration does not apply. This means that a contract can be gratuitous, with only one party coming under any duties to the other. For example, a contract to perform services for no consideration. If consideration is given, such as in a sales contract, the contract is said to be onerous.
In terms of terminology, English law uses the phrase 'entered into the contract', whereas, in Scotland, the phrase is 'subscribed to the contract'. The act of signing a contract in Scotland is referred to as 'subscribing'. This subscription is essential for creating a legally binding written contract.
The Requirements of Writing (Scotland) Act 1995 outlines the execution requirements for contracts in Scotland. While these are mandatory only for certain categories of contracts, it is recommended that they are followed for all written Scottish contracts to ensure validity.
In Scotland, an authorised signatory is anyone given authority by the company to sign, and they do not need to hold any particular office. This differs from English law, where an authorised signatory is limited to a director or company secretary.
For a contract to be validly executed by a company in England, it must be signed by a director in the presence of a witness, or by two directors or a director and company secretary. In Scotland, a contract can be validly executed by a single director, company secretary, or authorised signatory, with their signature witnessed. Alternatively, it can be signed by two directors, a director and company secretary, or two authorised signatories.
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Contract creation
Scottish contract law and English contract law share many similarities, but there are some key differences to be aware of when creating a contract. Firstly, the terminology used in Scottish contracts differs from that used in English contracts. For example, in Scottish contracts, the term "subscribed by" is used instead of "signed by", and "granter" is used instead of "signee". The execution of contracts also differs between the two jurisdictions. In Scotland, contracts are usually signed on the last page before the schedule, and there must be text from the final clause of the main body of the contract on the same page as the first signature to meet the self-proving test. Additionally, Scottish law requires all contracts to be signed by all parties in a single document, which was previously required to be delivered physically, but legislative changes in 2015 allowed for the execution of a contract in counterparts in different locations.
Another key difference is that the English requirement for consideration does not apply in Scotland, which means that it is possible to have a gratuitous contract, where only one party has duties to the other. For example, a contract to perform services for no consideration. If consideration is given, such as in a sales contract, the contract is said to be onerous.
In Scotland, a contract is created by a bilateral agreement and should be distinguished from a unilateral promise, which is still recognised as a distinct and enforceable obligation. There must be an agreement on the essentials of the contract, including the parties involved, the subject matter, and the price. It's important to note that contracts in Scotland do not always need to be in writing and can be created orally, except in certain circumstances outlined in the Requirements of Writing (Scotland) Act 1995. This includes the creation, transfer, variation, or extinction of a real right in land, and a gratuitous unilateral obligation except in the course of business.
Finally, it's worth noting that the Contract (Rights of Third Parties) Act 1999, an English statutory provision, does not apply in Scotland. Instead, the common law doctrine of jus quaesitum tertio is applied.
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Joint liability
Scottish contract law and English contract law have many similarities, but there are also some key differences that are important to note when discussing joint liability. The concept of joint liability arises when two or more parties are jointly responsible for fulfilling a contractual obligation. In both England and Scotland, the law recognizes that multiple parties can be involved in a contract and that their liabilities and responsibilities may need to be addressed separately or jointly.
In English contract law, joint liability is typically associated with joint and several liability. This means that each party to a contract has a responsibility to ensure that the obligations are fulfilled, and if one party fails to do so, the other parties may be held liable for the entire obligation. In other words, a claimant can choose to pursue all or just one of the parties for the full amount of any damages or losses incurred due to a breach of contract. This principle applies to both contractual and tortious liabilities. An example of this is when multiple defendants are found negligent and held jointly and severally liable for the harm caused to a claimant.
Scottish law takes a slightly different approach to joint liability. While Scotland also recognizes joint and several liability, the law provides for a more nuanced approach. In Scotland, there is a distinction made between 'joint and solidary' liability and 'joint and divided' liability. Joint and solidary liability is similar to the English concept, where each party is responsible for the entire obligation. However, with joint and divided liability, each party is only responsible for a proportionate share of the obligation. This share can be determined by the terms of the contract or by the court if a dispute arises.
It is worth noting that in Scotland, the law also recognizes a concept known as 'collateral warranty'. This is where a party to a contract gives a separate warranty or promise to one of the other contracting parties. This warranty is additional to the main contract and can be enforced separately. Collateral warranties are often used in construction projects, where a contractor may give a warranty to a client in addition to the standard contract terms. This provides an additional layer of protection for the client and allows them to seek remedies directly from the contractor if the warranty is breached.
In terms of enforcement, both England and Scotland have similar approaches to pursuing joint liabilities. If one party fails to fulfill their obligations, the other parties can take legal action to enforce the contract. This may involve seeking specific performance, where the court orders the party in breach to fulfill their obligations, or claiming damages to compensate for any losses incurred due to the breach. In both countries, it is important to carefully draft contracts to clearly outline the responsibilities and liabilities of each party, especially when joint liability is a potential factor.
In conclusion, while Scottish and English contract law share many similarities, there are nuanced differences in their approaches to joint liability. These differences highlight the importance of understanding the specific legal system when drafting contracts and considering potential liabilities. By recognizing these distinctions, individuals and businesses can ensure that their contracts are enforceable and that their rights and obligations are clearly defined under the appropriate legal framework.
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Contract modification
Scottish contract law and English contract law share many similarities, but there are some differences to be aware of when it comes to contract modification. In Scotland, the law does not require consideration for a contract to be valid, whereas English law does. This means that under Scottish law, a contract can be modified by a simple agreement without needing to provide additional consideration, such as extra payment or additional services. This provides a significant advantage for businesses by simplifying the contractual process and allowing greater flexibility.
For example, let's say a service agreement is coming to an end, but the parties have agreed to extend it for another year. Under Scottish law, this modification can be agreed upon without any additional considerations. However, under English law, this modification would require additional consideration to be legally valid.
Another difference between Scottish and English contract law is the terminology used. In English law, parties may say they "entered into the contract", while in Scotland, the correct term is "subscribed to the contract". The Scottish term "subscribed" implies that the contract has been signed by the parties involved. This is an important distinction, as the execution of contracts (i.e. signing) is different between the two legal systems.
Scottish law previously required all contracts to be signed by the parties in a single document and delivered physically. However, legislative changes in July 2015 allowed for the execution of a contract in counterparts in different locations. This change brought Scottish law closer to English law, which allows for the execution of contracts in counterparts.
It is important to note that the Requirements of Writing (Scotland) Act 1995 outlines the execution requirements for contracts in Scotland. While these requirements are technically only mandatory for certain types of contracts, it is best to follow them for all written Scottish contracts to ensure legal validity. These requirements include specific exceptions for contracts related to the creation, transfer, variation, or extinction of a real right in land.
In summary, while Scottish and English contract law share many similarities, there are some key differences in contract modification to be aware of. Scottish law does not require consideration for a contract to be valid, allowing for simpler modifications. Additionally, Scottish law has unique terminology and execution requirements for contracts, which businesses must understand to create legally binding agreements.
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Frequently asked questions
There are several differences between the two, including the following:
- Scottish law does not require consideration for a contract to be valid, unlike English law.
- In English law, parties to a contract may say they "entered into the contract", whereas in Scotland, the term is "subscribed to the contract".
- In English law, the term "jointly" liable implies that each party is liable for the full amount. In Scottish law, it means that each party is liable only for a proportion of the total amount.
- English law does not recognise the concept of "personal bar", which is present in Scottish law.
These differences can have significant implications for businesses and individuals operating in Scotland and England, as neglecting the nuances when finalising a contract under Scottish law could render the document legally invalid.
Some examples include:
- The terminology used in Scottish contract law differs from that of English contract law. For instance, "signed by" in English becomes "subscribed by" in Scottish, and "signee" becomes "granter".
- The execution requirements for contracts in Scotland are outlined in the Requirements of Writing (Scotland) Act 1995, which mandates that contracts must be signed by all parties in a single document and delivered physically.
Yes, there are also many similarities between the two legal systems. In many areas, Scottish and English contract law are identical, and they sometimes even share leading authorities.
It is important to note that this response provides a general overview, and specific legal advice should be sought for detailed guidance on Scottish and English contract law.
