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Experts recommend enshrining contract formation in statute and abolishing postal acceptance

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Professor Hector MacQueen

The Scottish Law Commission has recommended that the rules on formation of contract should be included in statute and that the “postal acceptance rule” be abolished in a new report on contract law.

Its review concludes that some parts of contract law are unclear, sometimes difficult to find and in need of modernisation. We consulted widely and examined the law in other parts of the World.

The commission makes the following main recommendations:

  • There should be a new statutory statement setting out the rules on formation of contract. This will make clear key points such as when communications between people making contracts take effect (this is important when so much business is now done by email);

  • Abolition of the “postal acceptance rule” (an old rule that a contract is formed when an acceptance of an offer is put in the post, as opposed to received). This dates from the nineteenth century when post was the main means of communication. The rule is out of step with modern business;

  • Remedies for breach of contract should be reshaped. The idea is to improve ways of encouraging people to sort out disputes themselves, rather than ending up in court or having to terminate their contract altogether.

    • Professor Hector MacQueen, lead commissioner on the project, said: “I believe that when implemented this report will do much to remove current uncertainties as well as simplifying and modernising the law. It will also make the law on formation of contract more accessible than ever before to lawyers and non-lawyers alike.”

    The report makes 35 recommendations in total and contains a draft bill which would put into effect those recommendations.

    Read the report here

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