Scottish Law Commission Publishes Discussion Paper on Remedies for Breach of Contract

12 July 2017

By Allison Curley

The Scottish Law Commission announced earlier this week in a News Release that their Discussion Paper on Remedies for Breach of Contract has now been published. The Discussion Paper is part of a general review of Scots contract law. The News Release suggests that the Discussion Paper considers the tools available to parties when a contract situation goes awry, and how these tools compare to others within the European Union. Further, the Discussion Paper examines the ways in which contract law could be made clearer and more comprehensive. The News Release notes that there is a focus in the Discussion Paper on reforming outdated language within the contract law sphere so that individuals and businesses can better understand and utilize appropriate remedies in circumstances where there is a dispute over a contract.

The SLC notes in the Discussion Paper that this publication was produced within the context of the Draft Common Frame of Reference. The Discussion Paper describes the DCFR as model law (as opposed to legislation) that was assembled by a large group of academic lawyers from throughout the European Union (including Scotland). The DCFR was produced to promote legislation in the contract law field that would be more coherent and consistent. The SLC suggests in the Discussion Paper that the DCFR is seen as a tool for conducting a “systematic health check” of the state of contract law in Scotland. In this Discussion Paper, the SLC employed the strategy by which they first examined what the DCFR says on certain issues, and then compared this to present-day contract law in Scotland.

With respect to impact assessment, the SLC notes in the Discussion Paper that it is imperative for the SLC to be able to assess the impact of any reform proposals made. The SLC suggests that economic impact is particularly relevant in the context of this Project, and invites the public to submit any evidence that would quantify the issues raised in the Discussion Paper. In particular, the SLC welcomes consultees to submit any information pertaining to defensive or self-help remedies. This would include any material on why and how these remedies are used, the effectiveness of these remedies, and how these remedies impact small and medium-sized enterprises.  The News Release suggests that the SLC invites the public to share their perspectives on whether new remedies should be introduced in contract law to mitigate present-day legislative gaps, such as the issue of transferred loss.

The Discussion Paper is divided into twelve chapters. Chapters two through five discuss defensive or self-help remedies, chapters six through eight examine judicial remedies, and chapters nine through eleven are devoted to miscellaneous topics, including transferred loss claims, contributory negligence, and a general statutory restatement. The final chapter is composed of the questions asked of consultees. The SLC requests consultation throughout the Discussion Paper, but chapter twelve is devoted exclusively to the 79 questions asked of consultees on the various topics examined within the Discussion Paper.

Participation in the consultation phase closes on October 6 2017, and the SLC reports that they hope to produce a Report on the subject in early 2018.

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