Seòmar agus comataidhean

I will ask Colin Gilchrist and Michael Paparakis, because they have been dealing on the official side.

Good morning. The bill that we are discussing today implements recommendations that the Scottish Law Commission made in 2018. It largely restates the current Scots law of contract formation while clarifying some doubts about the law that have crept in over the years.

Contract law is vitally important to our everyday economic life and for all types of transactions, involving businesses and individuals alike. Many contracts are made, carried through, and become the subject of disputes between parties who have no professional assistance. One of the bill’s principal purposes is to produce legal rules that are clear, certain and accessible. Like most of the witnesses that you have heard from, I think that we have achieved that.

As you know, part 1 of the bill concerns the formation of a contract. The main reform that is proposed in part 1 is the abolition of the postal acceptance rule. Abolition of this rule has been a long-time recommendation that the SLC has made repeatedly over the past 50 years. I am glad to bring forward a provision that will, finally, give effect to this recommendation and bring Scots law into line with other international instruments that have no such rule.

Part 2 of the bill, meanwhile, deals with remedies for breach of contract. Although that part is not as wide as the consultation topics discussed by the SLC, it is in line with the SLC’s recommendations and stakeholder opinion. The committee has heard from a number of witnesses about why the scope of the bill should not be widened.

There is one exception, which is the law of retention. I wrote to the committee in October to set out my intention to lodge amendments at stage 2 that would reform the law. That is the end result of a period of consultation, building on the considered work of the SLC and Lorna Richardson of the University of Edinburgh over the past decade or so. The law of retention is unclear, and we have in the bill an opportunity to introduce some much-needed clarity. Having listened to the evidence given to this committee, I am pleased that there has been broad consensus on the general purposes of the bill.

I look forward to answering the committee’s questions.

As the committee heard from a range of stakeholders, there is uncertainty in a number of specific points around contract law. I think that only one respondent to the committee’s call for views was outright against reform. The overwhelming majority of consultees agree that law reform is needed in this area.

The bill largely restates the common law on formation of contract to improve accessibility to the law and make important reforms to clarify and modernise the law. As I said in my opening statement, the principal reform on contract formation is the abolition of the postal acceptance rule, which has been a repeated recommendation by the SLC for more than 50 years. We are going to make the law clearer and more accessible, and the committee and Parliament should take that on board.

It is in the explanatory notes, not in the legislation. We think that that covers things, guidance-wise. That is how we are future proofing the legislation, instead of being too specific in the bill itself, because who knows what the mode of communication could be in five to 10 years? We feel that that is sufficient, but we are open to suggestions, if the committee thinks that it can be strengthened.

The postal acceptance rule means that contracts can be formed without one party ever knowing that their offer has been accepted, and I agree with the majority of stakeholders that that is at odds with common-sense expectations. The law causes uncertainty and confusion for anyone who is not aware of the postal acceptance rule, and I understand that, in practice, it is commonly excluded by well-informed parties. Abolishing the rule will mean that the law will align better with reasonable expectations of most people, including small and micro businesses. As I have said several times, people have been calling for the rule to be abolished for more than 50 years.

Yes, I do.

Absolutely. I think that, both in our constituencies and personally, we are all dealing with the fact that Royal Mail is totally different from what it was 20 years ago. We have to move with the times.

One thing that they will provide is more scope for remedies to solve any conflicts. That will be clearer. I do not know whether Michael Paparakis has anything to add on that.

Absolutely. If the committee has recommendations about drafting and it thinks that they can make the bill stronger, I am always happy to consider them.

The provisions in the bill are the 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. It was clear from the responses that the SLC received that it was not agreed that the law in the other areas of contract law should be reformed. It was thought that, in some areas, the law would be best left for the courts to develop. That includes issues such as the battle of the forms, interpretation and penalty clauses. When the Scottish Government consulted in 2024, respondents agreed with that position, with the exception of the law of retention, on which I intend to lodge amendments to reform. I see this as a very focused bill, which introduces much-needed reform in contract law.