Commercial Contracts
The agreements a trading business runs on, drafted, negotiated and reviewed under Scots law and not adapted from an English precedent.
Scots contract law differs from the law of England and Wales in substance and not only in vocabulary. There is no doctrine of consideration, so a promise may bind without anything being given in return. Where a contract confers a benefit on somebody who is not a party to it, the governing rules are contained in a Scottish statute of their own and not in the English act that businesses often assume applies throughout the United Kingdom.
The statutory control of unfair contract terms operates through a separate Scottish Part of the legislation, with tests that are not identical to the English ones.
The period within which a contractual claim must be brought is set by Scots prescription and not by English limitation.
The practical consequence is constant and unremarkable. A template that has been downloaded, bought or inherited from a counterparty is very often an English document. It will usually work. Occasionally it will not, and the failure tends to be discovered at the only moment that matters.
Drafting
Most of this work is routine and repays being done carefully. Standard terms of business that have actually been incorporated into the contract, and not merely printed on the back of an invoice. Supply and distribution agreements with a termination mechanism that can be operated. Agency and consultancy arrangements in which the status of the individual has been considered. Confidentiality agreements that do not expire before the risk does.
We give particular attention to the liability provisions, which is where the money is. The three expensive mistakes we see most often are a cap expressed in terms that cannot be applied, an exclusion that does not meet the statutory test of fairness, and an indemnity that quietly reverses the allocation of risk the parties thought they had agreed.
Review
Businesses more often need a contract read than written. The question is rarely whether a document is enforceable and almost always what it commits them to and what happens if matters go wrong. We answer in those terms: what you are liable for, what you can withdraw from, what is worth negotiating and what can be accepted.
Governing law
A Scottish business that contracts on English law and the exclusive jurisdiction of the English courts has agreed to litigate in another system, at a distance, under rules its own advisers do not practise in. That is on occasion the right commercial answer. It should be a decision somebody has taken, and not a clause nobody read.