Contract (Formation and Remedies) (Scotland) Bill: equality impact assessment

Consultation

The Scottish Law Commission (“the SLC”) published 4 Discussion Papers as part of its reform project. These were on interpretation of contract (published 2011),^[2] formation of contract (published 2012)^[3], penalty clauses (published 2016),^[4] and remedies for breach of contract (published 2017).^[5] Each discussion paper suggested either restatement and reform of the law (formation and remedies) or reform of the law only (interpretation and penalties). A consultation on a draft of what is now Part 1 of this Bill, on formation of contract, took place from 1 September to 3 November 2017.^[6]

The aim of the reform project was to assess the existing Scots law of contract against international comparators, in particular the Draft Common Frame of Reference (DCFR).^[7] The SLC’s Report on Review of Contract Law: Formation, Interpretation, Remedies for Breach, and Penalty Clauses (“the Report”) was published in 2018 and set out its recommendations for reform, which this Bill takes forward in full.

In July 2024, the Scottish Government published a consultation seeking general views on the Report. In line with the process that Scottish Ministers set out to the Scottish Parliament in respect of potential Bills implementing older SLC recommendations, the consultation sought to establish: whether the landscape around this area of the law had changed since the Report was published and, if so, whether the changes were material to the recommendations contained in the Report; and, that the consultation views received by the SLC were still broadly held.^[8]

Analysis of the responses found that the majority of respondents expressed continued support for the recommendations of the SLC and were not aware of material developments in the law or practice that require those recommendations to be revisited. The exception was the law of retention which respondents felt was less clear now than when the SLC made its recommendations. The Scottish Government consulted on a statutory scheme for the law of contractual retention in March 2025.^[9]