formalities Flashcards
Are there any specific formalities required to create a contract?
No, there are no specific formalities required for the creation of a contract. Ordinary contracts can be formed orally, in writing, or through other means such as fax, pdf, or text message.
Can a contract be formed without face-to-face communication?
Yes, contracts can be concluded through various means such as fax, pdf, text message, or even telepathy (theoretically). They don’t necessarily need to be formed in person.
What is an example of an unconventional way to propose or create a contract?
An example of an unconventional way to propose or create a contract could be skywriting, or even tracing the proposal in newly-fallen snow, or by telepathy.
What does s1(1) of the Requirements of Writing (Scotland) Act 1995 state about the creation of contracts?
s1(1) of the Requirements of Writing (Scotland) Act 1995 states that there are no specific requirements for formalities in the creation of ordinary contracts, allowing flexibility in how they are formed.
When is a contract required to meet particular formalities?
A contract must meet particular formalities when:
The offer specifies that acceptance must be in a particular form (e.g., in writing).
Certain types of contracts, such as those involving land or gratuitous unilateral obligations, must be in writing under s1(2) of the Requirements of Writing (Scotland) Act 1995 (ROWSA).
Which types of contracts require writing under ROWSA 1995?
Under s1(2) of ROWSA 1995, contracts that require writing include:
Contracts or unilateral obligations for the creation, transfer, variation, or extinction of an interest in land.
Gratuitous unilateral obligations not made in the course of business (e.g., promises).
What must be done for a contract to meet the writing requirement under ROWSA 1995?
For a contract to meet the writing requirement under ROWSA 1995, it must be signed (subscribed) by the parties. This can include traditional “wet ink” signatures or digital electronic signatures (as per s9A to 9G of ROWSA 1995).
What happens if a contract fails to meet the writing requirements under ROWSA 1995?
If a contract fails to meet the writing requirements under ROWSA 1995, it is not validly formed and cannot be enforced.
What are “gratuitous unilateral obligations” under the Requirements of Writing (Scotland) Act 1995 (ROWSA)?
“Gratuitous unilateral obligations” are not clearly defined under ROWSA 1995, and the courts have not provided a clear indication of which promises are considered gratuitous. The distinction between gratuitous and non-gratuitous promises remains uncertain.
Are all promises considered gratuitous under ROWSA 1995?
It is commonly accepted that all promises are considered gratuitous because, in these cases, only one party (the promisor) is bound by the promise. However, there is debate about whether a promise stops being gratuitous if the promisor receives some benefit from it, even if the promisee is not bound.
Is it safe to assume that all promises are gratuitous under ROWSA 1995?
Yes, it is safer to assume that all promises are gratuitous and, therefore, writing is required under ROWSA 1995, unless the promise is made in the conduct of business.
When would writing not be required for a promise under ROWSA 1995?
Writing would not be required for a promise if the promise is made in the course of business, as illustrated in the case RBS v Carlyle.
Does a contract where only one party is obliged to perform (a ‘gratuitous contract’ or ‘unilateral contract’) need to be in writing under the Requirements of Writing (Scotland) Act 1995 (ROWSA)?
No, ROWSA does not require such contracts to be in writing. Prof. Martin Hogg argues that contracts are inherently bilateral. The key distinction is that ROWSA applies to unilateral promises, not to contracts, even if they are gratuitous (where only one party is obligated).
What is the difference between unilateral and bilateral contracts according to Prof. Martin Hogg?What is the difference between unilateral and bilateral contracts according to Prof. Martin Hogg?
According to Prof. Martin Hogg, the distinction between unilateral and bilateral contracts is based on how the obligation is formed. In a unilateral contract, the obligation is created by the actions of one party alone, while in a bilateral contract, the obligation arises from the actions of both parties. Therefore, all contracts are bilateral by nature.
How does Prof. Martin Hogg’s view affect the interpretation of ROWSA?
If we accept Prof. Hogg’s argument, then ROWSA’s requirement for writing applies only to unilateral promises, not to contracts, even if only one party is bound by the contract (gratuitous contract). This suggests that s1(2)(a)(ii) of ROWSA applies to promises and not to contracts, even if they are gratuitous.
What is the key takeaway from Prof. Hogg’s argument regarding ROWSA?
The key takeaway is that ROWSA applies only to promises (which are unilateral), not to contracts. Even if a contract is gratuitous (where only one party has obligations), it is still considered bilateral and does not fall under the gratuitous unilateral obligation category in s1(2)(a)(ii) of ROWSA.
What is a gratuitous unilateral obligation that requires to be in writing under s1(2)(a)(ii) of the Requirements of Writing (Scotland) Act 1995 (ROWSA)?
A gratuitous unilateral obligation requires writing when only one party is bound by the obligation and no benefit is gained by the promisor. The obligation is unilateral (created by the action of one party) and gratuitous (one party performs without expecting a return benefit).
What types of contracts do not qualify as gratuitous unilateral obligations under ROWSA?
Contracts where both parties are required to perform onerous obligations are definitely not gratuitous unilateral obligations. These are bilateral contracts where both parties contribute, and thus they do not need to be in writing under ROWSA. Similarly, contracts where only one party has a substantive obligation are also not unilateral and are bilateral, so they do not require writing under ROWSA.
What types of promises are likely to be considered as gratuitous unilateral obligations under ROWSA?
Promises where the promisor receives no benefit are definitely gratuitous unilateral obligations and require to be in writing. However, promises where the promisor does receive a benefit are probably considered gratuitous unilateral obligations as well, though it may be argued that the benefit makes the promise onerous. Therefore, it is safer to assume that they require writing.
What happens when only one party has to perform a substantive obligation in a contract under ROWSA?
Even if only one party is required to perform a substantive obligation, the contract is considered bilateral because both parties are involved in its creation. As such, it is not a gratuitous unilateral obligation and does not require to be in writing under ROWSA.
What is personal bar under the Requirements of Writing (Scotland) Act 1995 (ROWSA 1995)?
Personal bar prevents a party from denying the validity of a contract, even if the contract must be in writing under ROWSA 1995 and is not, when specific conditions are met. It can be invoked to enforce a contract despite its failure to comply with writing requirements.
What conditions must be satisfied for personal bar to apply under ROWSA 1995?
For personal bar to apply, the following conditions must be met:
- Party A (the party wishing to enforce the contract) must have acted or refrained from acting in reliance on the contract (s1(3)).
- Party A’s reliance must have materially affected them (s1(4)(a)).
- Party A would be adversely affected by the withdrawal of Party B from the contract (s1(4)(b)).
- Party B must know and accept that Party A has relied on the contract (s1(3)).
What are the consequences of personal bar under ROWSA 1995?
The consequences of personal bar are:
- The party denying the contract (Party B) is not entitled to withdraw from the contract.
- The contract is not regarded as invalid, even though it did not comply with s1(2) of ROWSA 1995.
Does personal bar apply to all types of contracts?
No, personal bar only applies to agreements that are otherwise valid. This means that the parties intended to create legally binding obligations, and the only issue with the agreement is the lack of written formalities.
