L3: Formation
Monday, 5 October 2020
08:51
G. ROLE OF WRITING ch 3.2-3.11
Writing required to be binding unless made in course of business
Contracts not legal requirement of voluntary obligation creation (e.g.
contract/promise)
“Writing” = “typing, printing, lithography, photography and other modes of
representing or reproducing words in a visible form” (Interpretation Act 1978,
Sch 1; Interpretation and Legislative Reform (Scotland) Act 2010 s 25)
(1) Contracts Which Must Be In Writing: Formal Writing
Battle of forms:
Consumer contract: Supplier (one party) uses standard terms
commercial contract: both parties uses standard terms
Contract for international sale of goods (CISG)
difficulties in which terms applies; ‘overriding clause’ party stipulating their terms prevail’
alterations material if relating to: price, payment, quality + quantity of goods, place+time of
delivery, extent of liability and the settlement of disputes
draft for common frame of referencing (DCFR): contract formed if parties reach agreement
although using conflicting standard forms, terms are those of forms that are common in
substance; avoidable by pre-contractual statement to that affect not in standard form, or
prompt objection of other parties form.
Recently: courts no longer apply strict offer/acceptance; instead look to discern agreement from
whole circumstances of case
Pre-contractual liability: when negotiating must look after own interests no obligation/liability to
other except (misrepresentation), (fraud), coercing (force and fear), or exploiting relationships
(undue influence) make contract voi/voidable (unjustified enrichment); applicable when
negotiations break down but there has been some performance.
Limited exceptions: 1. Liability only arises if contract arises from negotiation; prior to contract
formation + legal commitment parties are free (includes right to withdraw negotiations) 2.
Positive action often required for damaging factors; mis-statement, innocent negligent or
fraudulent; Giving advice/acting in way which takes advantage of trust + confidence reposed by
others
Requirements of Writing (Scotland) Act 1995
(a) Obligations needing formal writing:
Text (written; paper or electronic) capable of comprehension or readability; needs signed
(subscribed - at end)
2 methods of constituting obligations formally:
Traditional: paper and ‘wet ink’
Electronic: digital medium + electronic signatures
(i) Contracts relating to transfer of land:
Real rights in land (immoveable property); purchase + sale, leases above one
year; require writing; either party can withdraw before in writing (possible
barred if oral contract where one party has acted; legally protected)
(ii) private Gratuitous obligations: i.e. not undertaken during businesses.
(b) Formal validity
Contracts/obligations above require granter’s subscription (signature at foot of paper
doc.) or granters signature attached to electronic doc.
Subscription; buyer signs offer + seller signs acceptance (exchange of missives) Or
single document both parties subscribe
(c) Probativity (self-proving; presumed authentic)
not necessary for formal contract completion; writing may acquire probativity status by
virtue of proof; by being a writing containing:
(i) granter’s subscription
(ii) signature of one witness to above subscription
(iii) Statement of the name + address of each witness (testing clause)
Up party proof is against to disprove in court; shift of burden of proof
Monday, 5 October 2020
08:51
G. ROLE OF WRITING ch 3.2-3.11
Writing required to be binding unless made in course of business
Contracts not legal requirement of voluntary obligation creation (e.g.
contract/promise)
“Writing” = “typing, printing, lithography, photography and other modes of
representing or reproducing words in a visible form” (Interpretation Act 1978,
Sch 1; Interpretation and Legislative Reform (Scotland) Act 2010 s 25)
(1) Contracts Which Must Be In Writing: Formal Writing
Battle of forms:
Consumer contract: Supplier (one party) uses standard terms
commercial contract: both parties uses standard terms
Contract for international sale of goods (CISG)
difficulties in which terms applies; ‘overriding clause’ party stipulating their terms prevail’
alterations material if relating to: price, payment, quality + quantity of goods, place+time of
delivery, extent of liability and the settlement of disputes
draft for common frame of referencing (DCFR): contract formed if parties reach agreement
although using conflicting standard forms, terms are those of forms that are common in
substance; avoidable by pre-contractual statement to that affect not in standard form, or
prompt objection of other parties form.
Recently: courts no longer apply strict offer/acceptance; instead look to discern agreement from
whole circumstances of case
Pre-contractual liability: when negotiating must look after own interests no obligation/liability to
other except (misrepresentation), (fraud), coercing (force and fear), or exploiting relationships
(undue influence) make contract voi/voidable (unjustified enrichment); applicable when
negotiations break down but there has been some performance.
Limited exceptions: 1. Liability only arises if contract arises from negotiation; prior to contract
formation + legal commitment parties are free (includes right to withdraw negotiations) 2.
Positive action often required for damaging factors; mis-statement, innocent negligent or
fraudulent; Giving advice/acting in way which takes advantage of trust + confidence reposed by
others
Requirements of Writing (Scotland) Act 1995
(a) Obligations needing formal writing:
Text (written; paper or electronic) capable of comprehension or readability; needs signed
(subscribed - at end)
2 methods of constituting obligations formally:
Traditional: paper and ‘wet ink’
Electronic: digital medium + electronic signatures
(i) Contracts relating to transfer of land:
Real rights in land (immoveable property); purchase + sale, leases above one
year; require writing; either party can withdraw before in writing (possible
barred if oral contract where one party has acted; legally protected)
(ii) private Gratuitous obligations: i.e. not undertaken during businesses.
(b) Formal validity
Contracts/obligations above require granter’s subscription (signature at foot of paper
doc.) or granters signature attached to electronic doc.
Subscription; buyer signs offer + seller signs acceptance (exchange of missives) Or
single document both parties subscribe
(c) Probativity (self-proving; presumed authentic)
not necessary for formal contract completion; writing may acquire probativity status by
virtue of proof; by being a writing containing:
(i) granter’s subscription
(ii) signature of one witness to above subscription
(iii) Statement of the name + address of each witness (testing clause)
Up party proof is against to disprove in court; shift of burden of proof
