Contract (Formation and Remedies) (Scotland) Bill: child Rights and wellbeing impact assessment

Child Rights and Wellbeing Impact Assessment

1. Brief Summary

Key terms

Contract: A legally binding agreement between two or more parties.

Remedies: The means used by courts to enforce legal rights and address legal wrongs. These can take various forms, including an award of money.

Mutuality: If both parties under a contract have rights and duties then these are interdependent and this principle is known as the mutuality of contract. For example, if Party A agrees to sell a second-hand vehicle to Party B and Party B agrees to pay a certain amount then both parties have obligations: Party A is obliged to deliver the vehicle and Party B is obliged to pay the agreed amount.

The Contract (Formation and Remedies) (Scotland) Bill implements recommendations of the Scottish Law Commission (SLC). The recommendations can be found in the its Report on Review of Contract Law: Formation, Interpretation, Remedies for Breach, and Penalty Clauses. Contract law is important for all types of transactions made everyday by businesses and individuals. Many contracts are made, carried through, and argued over by people who have no professional assistance, like a solicitor to help them.

The Scots law of contract has largely developed as a matter of common law, which includes the reasoning of judges in previous court cases that become precedents for future cases. This limits the law’s accessibility to those without legal training. It is therefore important economically and socially that the contract law regime in Scotland is fit for 21^st century conditions. The Bill restates and reforms aspects of the law on how contracts are formed and how the law might deal with someone who does not stick to what they agreed to in a contract. The overall policy aim is to produce rules that are clear, certain and accessible.

Start date of proposal’s development: September 2024

Start date of CRWIA process: September 2024

2. With reference given to the requirements of the UNCRC (Incorporation) (Scotland) Act 2024, which aspects of the proposal are relevant to/ impact upon children’s rights?

The framework introduced by the Bill has the potential to affect a child because most children are able to enter into a contract of some kind. For instance, a child below the age of 16 has the capacity to enter into a legal transaction provided that the transaction is of a kind commonly entered into by persons of the child’s age and the transaction entered into is one whose terms are not unreasonable. For example, a child under 16 may contract to buy a cinema ticket which such children commonly buy, but it might be unreasonable to pay £200 for the ticket.

The Bill’s provisions set out clearly how a contract is formed and some ways that a person can enforce a contract if the other person does not stick to their side of the bargain. None of these provisions are considered to have a direct or indirect effect on children’s rights as set out in the UNCRC. The general effect of the provisions is to make the law on contract formation clearer for persons (including children) by means of setting out a statutory framework. So while not changing anything in practise, it makes the law easier to navigate.

3. Please provide a summary of the evidence gathered which will be used to inform your decision-making and the content of the proposal

The Scottish Government consulted on the SLC’s recommendations in July 2024. As part of the consultation, we asked consultees what direct or indirect impacts there would be on children and young people if the recommendations were to be implemented. We also asked consultees for their views on whether there would be any impact on specific groups of children and young people if the recommendations were implemented, and what these might be.

In general, respondents took the view that the recommendations, if implemented, would have no notable impacts upon children. The Centre for Scots Law, for example, said “It is not clear that the proposals will have an impact on children and young people in particular. Any such impact would most likely be minimal. The aspect of contract law most obviously relevant to children and young people is legal capacity for formation of contract, but the rules on legal capacity are stated elsewhere - principally in the Age of Legal Capacity (Scotland) Act 1991.

Hector MacQueen was the only respondent who pointed out a positive impact if the recommendations are implemented, suggesting that “[i]t will be easier for children to acquire third party rights […].” Third party rights are rights conferred by contracting parties upon a person who is not a party to the contract.

Of those who responded to the second question we asked (about impact) none thought that there would be any impact on specific groups of children as a result of implementing the SLC’s recommendations.

4. Further to the evidence described at ‘3’ have you identified any 'gaps' in evidence which may prevent determination of impact?

No.

5. Analysis of Evidence

The evidence from consultees suggests that there is likely to be little to no impact on the rights of children as a consequence of the provisions in this Bill.

6. What changes (if any) have been made to the proposal as a result of this assessment?

As there was deemed to be minimal to no impacts on children and young people, there was not a need to make any changes and therefore no changes were made to the Bill as a result of this assessment.