Chamber and committees

No, I do not.

Amendment 1 agreed to.

I will be brief. Section 4 specifies what constitutes an offer—that is, a proposal made to one or more persons containing sufficiently definite terms to form a contract and indicating the intention of the offeror to be bound if the offer is accepted by the other party or parties. The current drafting refers to the person making the proposal as the “proposer”. In order to avoid arguments about whether the proposer could be a third party and for reasons of consistency with terms used elsewhere in the bill, my amendment 1 substitutes the word “proposer” with the word “offeror”.

I move amendment 1.

The Contract (Formation and Remedies) (Scotland) Bill is a Scottish Law Commission bill that implements a number of recommendations to reform the Scots law of contract.

I thank the Scottish Law Commission for reviewing the Scots law of contract, which was a substantial piece of work that involved four discussion papers and a report that took the best part of 10 years.

I also thank Professor Hector MacQueen, who was the lead Scottish law commissioner responsible for the project, for his work with the Scottish Law Commission in making these recommendations and for his continued engagement with the Scottish Government, as it has considered the SLC’s recommendations.

I also thank the Delegated Powers and Law Reform Committee convener and members for their scrutiny of the bill.

The bill is about the formation of contracts and the steps that can be taken when there is a breach of contract. Contract law is important because it affects various aspects of our everyday life, from buying a cup of coffee to significant financial transactions. Many contracts are formed and carried through by parties that have no professional assistance.

One of the bill’s principal purposes is to produce legal rules that are clear, certain and accessible, and it delivers on all of those. Currently, the bulk of the law on formation and remedies can be found in the common law. If enacted, this bill will put a number of important rules in a single accessible statute, written in clear English with helpful explanatory notes for laypersons and legal professionals alike.

At stage 1, stakeholders and the DPLR Committee asked me to consider preparing and publishing guidance on the bill’s provisions. I was pleased to write to the committee ahead of stage 2 to confirm my intention to do so. Together, the guidance and the bill will help individuals and small businesses more easily understand the law on contract formation and aspects of remedies, which will help them to be better protected in any contractual negotiations.

Given the variety of circumstances in which people may want to form a contract, one set of legislative rules that applies in all circumstances is unlikely to be flexible enough to cover every eventuality. Therefore, in order to ensure needed flexibility, the vast majority of the provisions in the bill are default. Parties can form a contract relying on these provisions or agree their own. This reflects the principle of party autonomy that was recognised as fundamentally important by stakeholders as well as by the lead committee.

Part 1 of the bill largely restates the current common law about contract formation. The main substantive reform is the abolition of the postal acceptance rule. Under that rule, a contract may be concluded without one party ever having received communication to that effect. The SLC has, with stakeholder agreement, recommended the abolition of that rule for a long time, and I am pleased to be doing so in this bill.

Part 2 of the bill deals with some remedies for breach of contract. The bill will reform parts of the law on the steps that one party can take when the other party has breached their contractual obligations.

Part 2 is not a full statutory statement of the law on remedies for breach of contract, but it is focused on some key areas. First, it covers circumstances in which both parties have broken the terms of a contract. Secondly, it covers circumstances in which a party needs to return a benefit—for example, money or goods—after a contract has been terminated. Thirdly, the bill will bring certainty to the law by making it clear that contributory negligence is available as a defence to claims for damages that are based on breach of contract.

At stage 2, amendments were agreed to clarify and reform the law of contractual retention. That is a remedy that is designed to encourage performance of a contract without one party having to go to court to enforce it. I was pleased that the Delegated Powers and Law Reform Committee agreed to those amendments, which are the end point of work that was undertaken by the SLC and other stakeholders such as Lorna Richardson of the University of Edinburgh. Because of those provisions, the law will now be clearer and more certain, and it will help parties to resolve contractual problems without the need to resort to potentially costly and protracted litigation before the courts.

During earlier proceedings, questions were raised by members about protections for smaller, less legally well-informed parties. The concern seems to be that such parties would be forced to enter a bargain to their detriment. I would like to make it clear that the bill will not affect consumer protection law, nor will it make changes to the unfair contract terms regime for small businesses. I have committed to publishing guidance about the bill, which will also help to protect weaker parties by ensuring that they have clear and straightforward information about the law.

I turn to commencement and transitional provisions for the bill. Stakeholders and the committee raised a concern at stage 1 that the bill’s provisions, when commenced, will apply to contracts that have already been formed. That is not the intention of the bill. While my officials will consider that in detail for commencement regulations—which is normal—my view remains that the provisions should apply only to new contracts that are formed after commencement.

I am grateful to the Delegated Powers and Law Reform Committee members for the way in which they have constructively engaged with me as the bill has progressed through the Parliament, and also for the way in which they have engaged with me on the four other SLC bills that have progressed through the Parliament during this parliamentary session. As we now come to the end of the session, I thank members and the clerks for the time that they have spent on the bills and the careful attention that they have given to what can often be technical legal matters.

I also take this opportunity to note that the deputy convener, Bill Kidd, who is a long-time member of the committee, is standing down from the Parliament. I wish him all the very best.

I move,

That the Parliament agrees that the Contract (Formation and Remedies) (Scotland) Bill be passed.

15:48

I thank everybody who has contributed to the debate. I have listened to what has been said and I am pleased with the recognition of the importance of the bill and the valuable work that the Scottish Law Commission has done in keeping our law up to date.

I want to touch on Roz McCall’s point about why the process has taken so long. I cannot speak to the reasons why Governments back in the 1970s and 1990s did not take forward contract law reform proposals. However, since 2013, there has been a lot of work involving the DPLR Committee and its predecessors, the Scottish Parliament and the Scottish Government to create a framework for quickly implementing Scottish Law Commission recommendations for law reform. Since 2013, 10 such bills have gone through. In this session alone, we have passed the Trusts and Succession (Scotland) Act and the Judicial Factors (Scotland) Act, and I hope that this bill on contract law will be passed, too. To my mind, the only older Scottish Law Commission report that remains unimplemented is that on section 53 of the Title Conditions (Scotland) Act 2003, so we are making progress with the Law Commission’s recommendations.

Contract law is fundamentally important to our everyday life. The bill will modernise important parts of Scots law of contract while clearing up doubts that have arisen over the years. The bill largely restates the common law on formation of contract to improve accessibility of the law, and it makes important reforms to clarify and modernise the law. The provisions are a result of a significant law reform project that was undertaken by the Scottish Law Commission, which included four discussion papers on different areas of contract law. The overwhelming majority of consultees agreed that the law needed reform.

On contract formation, the principal reform is the abolition of the postal acceptance rule, which has been a repeated recommendation by the SLC for more than 50 years. As Professor Hector MacQueen told the committee, to abolish the postal acceptance rule without partial codification of the law on contract formation would likely lead to less clarity.

Part 2 of the bill deals with remedies for breaches. Notably, the bill now includes the provision on the law of contractual retention. In 2018, the Scottish Law Commission said that, although the law of retention needed clarification, it should be left to the courts to do so. However, by 2024, stakeholders thought that legislation was needed to bring clarity to the law. We consulted on a scheme for reform of retention, which a majority of respondents agreed with. That came through clearly at stage 1, and amendments were lodged at stage 2 and agreed to by the committee.

I again thank the Scottish Law Commission and Professor MacQueen for the significant and comprehensive work that has been undertaken to review the Scots law of contract and for the Law Commission’s recommendations, to which the bill gives effect. The Scottish Law Commission serves a valuable function in reviewing our laws and making sure that they are fit for a modern Scotland. I thank it for the work that it has undertaken on the four other SLC bills that have been introduced in this session of Parliament and for its continued engagement with the Scottish Government in taking them forward. I commend the motion in my name.

We are in discussions with the programme to understand the impact, but we hope that funding can continue to be raised from other sources.

We are all aware of the great work that has been done by the Mark Scott leadership for life award programme. As I said to Mr O’Kane, we will continue to work with the organisation and see whether funding can be found from other portfolios to support it. We will continue to give it £30,000 in this financial year, which will provide it with levers for further funding avenues.

Since 2012, the Scottish Government has provided £1.4 million to the Outward Bound Trust to help to deliver the Mark Scott leadership for life award. Although we recognise the positive impact that the project continues to have, it is one of many that seeks financial support from the Government. Through our safer communities funding for 2026-27, we plan to provide £3.24 million in direct grant funding to 19 partner organisations. The Outward Bound Trust will receive £30,000 from that fund. As in previous years, that funding will help it to leverage support from other funders to enable it to deliver its programme.

Apologies—I am not aware of any such correspondence that has come in. I have not seen it yet, but I will chase that up today.

Funding pressures across the Scottish Government have meant that difficult decisions have been made and priorities have been identified. We continue to support the Mark Scott leadership for life award and look forward to continuing to work with the Outward Bound Trust. However, the Scottish Government has to align funding more closely to the vision of justice. That means reprioritising the initiatives that can be supported.

I highlight that the Scottish Government grant also provides part of the funding that is required to run the programme, which does a magnificent job of raising the required funding so that it can run each year. [Interruption.]

::Since 2012, the Scottish Government has provided £1.4 million to the Outward Bound Trust to help to deliver the Mark Scott leadership for life award. Although we recognise the positive impact that the project continues to have, it is one of many that seeks financial support from the Government. Through our safer communities funding for 2026-27, we plan to provide £3.24 million in direct grant funding to 19 partner organisations. The Outward Bound Trust will receive £30,000 from that fund. As in previous years, that funding will help it to leverage support from other funders to enable it to deliver its programme.

::We are in discussions with the programme to understand the impact, but we hope that funding can continue to be raised from other sources.