Corporate

Following the Scottish Law Commission’s report (PDF) earlier this year, the Scottish Government has announced a new bill to update Scots law to allow execution in counterpart and formally permit electronic conclusion of contract.

Historically, contracts under Scots law have been concluded by both parties signing the same physical copy.

The new law reflects changing practice (and commercial demands) where contracts are often negotiated between lawyers with the relevant signatories frequently located in geographically disparate locations.

Traditionally, signing has taken place by one party wet signing a copy (or two copies of the contract) and then physically sending the physical copy(ies) to the other party for their wet signature. The contract would usually come into effect upon the date of that second signature. This process invariably slows down the process of signing a contract once it’s terms have been agreed. Indeed, the Scottish Law Commission’s report noted there was evidence of contracts being switched from Scots to English law to overcome such delays.

In addition to incorporating the English law concept of execution in counterparts, the new law will also make it clear that all contracts can be concluded electronically – whether that be by email, CD or exchange of memory stick. The law will also enable the parties to nominate a single representative to receive and compile the completed contract, taking each party’s counterpart to assemble the completed contract.

The old way of signing contracts will remain open to parties, but as technology advances it is surely only a matter of time before delve tonic conclusion of contracts in counterpart becomes as standard under Scots law as it is today with English law contracts.

That’s something that can’t come soon enough.

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Martin Sloan

Partner at Brodies LLP
Martin is a partner in Brodies Technology, Information and Outsourcing group and has wide experience of advising clients on technology procurement and IT and business process outsourcing projects. Martin also advises on data protection (including the GDPR), and general technology and intellectual property law, and has a particular interest in the laws applying to social media and new technology such as mobile apps, contactless/mobile payments, and smart metering.
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