Handout 6 Requirements of Writing (Scotland) Act 1995 PDF

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Requirements of Writing (Scotland) Act 1995...

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Obligations 1 Handout 6 Written Formalities – The Requirements of Writing (Scotland) Act 1995 (RWSA 1995) Reading: G Black, Woolman on Contract, 6th ed., W Green (2018) Chapter 5, 5766 H MacQueen and J Thomson, Contract Law in Scotland, 5th edn, Bloomsbury (2020) 3.2 – 3.11 General rule Subject to certain exceptions, writing is not required. (RWSA 1995, s 1(1)) Or, as Stair put it: “every paction produceth action.” Stair, I,10,7 There are some exceptions. For example, under consumer protection legislation, some consumer contracts must include certain information in writing.

When writing is required under the RWSA 1995 1

Under RWSA 1995, s.1(2) a written document is normally required for the following contracts and promises: (i) a contract or unilateral obligation for the creation, transfer, variation or extinction of a real right in land; (ii) a gratuitous unilateral obligation except an obligation undertaken in the course of business; “Real right in land” includes ownership and lease for more than one year.

Requirements of Writing - “Traditional Documents” RWSA 1995, s.2(1): “No traditional document required by section 1(2) of this Act shall be valid in respect of the formalities of execution unless it is subscribed by the granter of it, or, if there is more than one granter, by each granter...” If an offer and acceptance are made in separate documents, both documents must be signed by the granter or granters to be considered legally valid. (s.2(2)).

Subscription 2

RWSA 1995: s.7(1): “[A] document is subscribed by a granter if it is signed by him at the end of the last page.” The subscription must be a voluntary act (Noble v Noble 1875 3R 74). Under s.7(2), a document is considered to have been subscribed if the granter signs: • the full name by which the granter is identified in the document or testing clause [s.7(2)(a)]; or • his surname is preceded by at least one forename or an initial or abbreviation or familiar form of forename [s.7(2)(b)]; or • some other description or initial or mark if it is the usual method of signing in the circumstances or it was intended to be the signature in the circumstances. [s.7(2)(c)] But if you use the last type (a “description or initial or mark”), it will not be probative (i.e. self-proving). If you wish to rely on it, you will therefore need to prove that the signature is genuine.

Examples: a party might sign: - James Andrew McDougall; or - James McDougall; or - James A McDougall; or - J McDougall; or - Big Jim

Subscription by corporate entities 3

Special rules apply. Subscription on behalf of blind granter or granter unable to write Provisions for this are set out in s.9. It allows for notarial execution. Probativity Sections 1 and 2 of the RWSA 1995 lay out the requirements for formal validity, but such a document will not be probative. A probative document is presumed by law to have been validly executed. If someone claims that the probative deed is actually invalid, that person must bring evidence proving their claim. But if a document is not probative, it is up to the person relying on the document to prove that it is valid. Witnesses Section 3 of the RWSA 1995 lays out the requirements for probativity. The document must be in writing and subscribed, and the granter’s subscription must also be witnessed. (Only one witness is required.) The rules relating to witnessing a document are as follows:

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The signature of the witness must be genuine. The granter cannot be a witness. 4

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The witness must know the granter (i.e. have credible information of the granter’s identity).

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The witness must be at least 16 years old The witness must not be mentally incapable of acting as a witness

Applying to the court for probative status Where a document has been subscribed but not witnessed, you can apply to the court for certification of probative status under s.4 of RoW(S)A.

Requirements of Writing - Electronic documents

s.9B(1)(a) of the 1995 Act states an electronic document will be validly executed if it is authenticated by the granter (or by each granter, if more than one). Authentication is defined in ss.9B and 9C of the 1995 Act and Reg. 2 of the Electronic Documents (Scotland) Regulations 2014. Authentication of electronic documents Sections 9B and 9C RWSA 1995 state that where an electronic document bears a certified electronic signature, it will be presumed to be valid. But what is a certified electronic signature? It is not a digitised version of your signature. 5

Rather, it is a form of encryption of the document that can be carried out only by the person who holds the key to that encryption. An electronic signature will be probative where the electronic signature of the granter is certified as authentic by the certification authority. (s.9C(2) of the 1995 Act and Reg. 3 of the 2014 Regulations).

Counterparts The Legal Writings (Counterparts and Delivery) Act 2015 was introduced to meet a problem. Suppose it is agreed that for contract to come into effect all parties to a contract must execute a single document embodying the terms of the contract but they do not intend to meet. See, e.g. WS Karoulis SA v Drambuie Liqueur (no 2) 2005 SLT 813, discussed in handout 4. This Act provides that each party can execute an identical copy. The contract will be effective when each copy is signed and delivered to the parties that did not sign it (or their nominees). Delivery can be electronic. The contract may specify when a document is deemed to have been delivered. These provisions do not replace those contained in the RWSA 1995. So, if formal writing is required under that Act its terms will also have to be complied with.

Contracts lacking formality – Personal Bar

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Where a document requires writing under the RWSA 1995, s1(2)(a), a failure to constitute the document in writing normally means that it is unenforceable. But there is an exception to this rule under s.1(3) of the 1995 Act. 1 This is the statutory provision for personal bar. Where a contract, obligation or trust mentioned in subsection (2)(a) is not properly constituted in accordance with the 1995 Act but the creditor under the contract has acted as though the contract is valid) and has done so with the “knowledge and acquiescence” of the debtor, the debtor cannot withdraw from the contract on grounds of invalidity, provided two conditions are met:

• The creditor must be affected to a material extent by his own •

actions. The creditor must be affected to a material extent by the debtor’s withdrawal.

The debtor is personally barred from withdrawing from the obligation and the agreement will become a binding contract. There must be a preceding contract and therefore the parties must have gone beyond the stage of negotiations and have actually reached the stage of consensus in idem (Advice Centre for Mortgages v McNicoll 2006 SLT 591). Example of personal bar in operation: Gray v MacNeil's Executor [2017] SAC (Civ) 9; 2017 S.L.T. (Sh Ct) 1

The provisions in s 1(3) and 1(4) replace rules found in the common law doctrines of rei interventus and homologation. These doctrines are therefore no longer relevant to contract or promises that require to be constituted in writing under s 1(2)(a).

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