Contract (Formation and Remedies) (Scotland) Act 2026

Part 1 — Formation of Contract

Autonomy of parties

Autonomy of parties: application of sections 2 to 13

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• (1) Sections 2 to 13 apply in relation to the formation of a contract except in so far as—

• (a) the offer, or any counter-offer, provides otherwise, or

• (b) the parties to the contract have, before the contract is formed, come to an agreement which (whether in regard to the formation of that contract or to the formation of contracts which include that contract) provides otherwise.

• (2) Such provision as is referred to in subsection (1)(a) and (b)—

• (a) may be express or implied, and

• (b) may be to the effect that the contract is to be formed—

• (i) in a way other than in accordance with sections 2 to 13, or

• (ii) in accordance with sections 2 to 13 but with such modifications to them as the parties may agree between themselves.

Requirements for the formation of a contract

Formation of contract: general

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• (1) A contract is formed on the parties coming to an agreement—

• (a) which they intend to have legal effect, and

• (b) which, taking any relevant enactment or rule of law into consideration, has both—

• (i) the essential characteristics of a contract of the kind in question, and

• (ii) sufficient content,

for it to be given legal effect as a contract of that kind.

• (2) A contract is formed on the parties coming to an agreement on all but one matter or all but some matters, provided that the agreement is otherwise an agreement within the meaning of subsection (1).

• (3) But where a party explicitly requires that, for a contract to be formed, there must be agreement on a specific matter there is no contract unless the parties come to an agreement on that matter.

• (4) For the purposes of subsections (1) to (3), whether there is agreement or not may be determined from the statements and conduct of the parties (whether or not such statements and conduct consist of, or include, the acceptance of an offer).

Formation of contract by unnotified acts

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• (1) Subsection (2) applies, in relation to the formation of a contract, where—

• (a) an offer provides expressly or impliedly,

• (b) the parties to the prospective contract have established a practice between or among themselves to the effect, or

• (c) there is a usage common to those parties to the effect,

that the performance of certain acts by the offeree forms the contract, even without notification of performance or of acceptance to the offeror.

• (2) The contract is formed on the offeree’s beginning to perform the acts in question.

• (3) Subsections (1) and (2) are subject to section 11(1)(b).

Offers

What constitutes an offer

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• (1) For a proposal to constitute an “offer” in relation to the formation of a contract—

• (a) the offeree must have reasonable grounds to suppose that the offeror intends the proposal to result in a contract if accepted, and

• (b) the proposal must be one which, after taking any relevant enactment or rule of law into account, could be given legal effect as a contract if accepted.

• (2) Any such offer may be addressed—

• (a) to a specific person,

• (b) to persons of a particular description,

• (c) to persons in general, or

• (d) to the public at large.

• (3) Subsections (1) and (2) are without prejudice to the application of any relevant enactment, or rule of law, in relation to the constitution of a unilateral promise.

Revocation of offer

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• (1) An offer in relation to the formation of a contract may be revoked by the offeror but only if the revocation takes effect before—

• (a) the offeree accepts the offer,

• (b) from the statements or conduct of the offeree it may be determined that, as mentioned in section 2(4), agreement has been reached, or

• (c) the offeree begins performance such as is referred to in section 3(2).

• (2) Subsection (1) is subject to subsections (3) and (4).

• (3) Where such an offer is addressed to persons in general, persons of a particular description or the public at large—

• (a) revocation is, in a case—

• (i) other than is mentioned in sub-paragraph (ii), to be effected by the same means as were used to make the offer, and

• (ii) where the means of effecting revocation is specified in the offer, to be effected by the means so specified, and

• (b) subsection (1) is to be construed, in determining whether revocation affects a particular person, as if for references in the subsection to the offeree there were substituted references to that person.

• (4) Revocation under subsection (1) is ineffective if—

• (a) it is manifest from the terms of the offer in question that it is intended to be irrevocable, or

• (b) the offeror has, in a declaration which has taken effect, stated that it is irrevocable.

Lapsing of offer on fundamental change of circumstances

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• (1) An offer in relation to the formation of a contract lapses on a fundamental change of circumstances and having lapsed can no longer be accepted.

• (2) Without prejudice to the generality of subsection (1), there is a fundamental change of circumstances if, after the offer is made but before a contract is formed, the offeror or offeree—

• (a) dies, or

• (b) becomes incapable of making any decision as to whether to form the contract.

• (3) But an offer such as is mentioned in subsection (1) does not lapse where, after it is made but before a contract is formed, the offeror or offeree becomes insolvent.

• (4) For the purposes of subsection (3)—

• (a) an offeror or offeree who is an individual, or the estate of which may be sequestrated by virtue of section 6 of the Bankruptcy (Scotland) Act 2016, becomes insolvent when—

• (i) that person’s estate is sequestrated,

• (ii) that person grants a trust deed for creditors or makes a composition or arrangement with creditors,

• (iii) a voluntary arrangement proposed by that person is approved,

• (iv) that person’s application for a debt payment programme is approved under section 2 of the Debt Arrangement and Attachment (Scotland) Act 2002, or

• (v) that person becomes subject to any other order or arrangement analogous to those mentioned in sub-paragraphs (i) to (iv) anywhere in the world, and

• (b) an offeror or offeree other than is mentioned in paragraph (a) becomes insolvent when—

• (i) a decision approving a voluntary arrangement entered into by that person has effect under section 4A of the Insolvency Act 1986 (“the 1986 Act”),

• (ii) that person is wound up under Part 4 or 5 of the 1986 Act or under section 367 of the Financial Services and Markets Act 2000,

• (iii) a receiver is appointed, under section 51(1) or (2) of the 1986 Act, over all or part of the property of that person,

• (iv) that person enters administration (“enters administration” being construed in accordance with paragraph 1(2) of schedule B1 of the 1986 Act), or

• (v) that person becomes subject to any other order or arrangement analogous to those mentioned in sub-paragraphs (i) to (iv) anywhere in the world.

• (5) Subsections (1) to (4) are without prejudice to the application of any relevant enactment, or rule of law, in relation to the transaction with regard to which the offer is made.

• (6) The Scottish Ministers may, by regulations subject to the affirmative procedure—

• (a) amend subsection (4)(a) or (b),

• (b) specify further circumstances in which a person becomes insolvent for the purposes of subsection (3).

• (7) In subsection (2)(b), “incapable” has the meaning given to that expression by section 1(6) of the Adults with Incapacity (Scotland) Act 2000.

Acceptance of offer

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• (1) In this Part, any reference to acceptance of an offer is to—

• (a) a statement (in whatever form), or

• (b) conduct (of whatever kind),

of the offeree which shows the unqualified assent of the offeree to the offer.

• (2) But any such conduct as is mentioned in subsection (1)(b) must be conduct of which the offeror is, or ought to be, aware.

• (3) Silence or inactivity is not in itself to be taken to show such assent.

• (4) This section is without prejudice to section 2(2) and (3).

Qualified acceptance of offer

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• (1) Subsection (2) applies where, as regards an offer (in this section referred to as “the original offer”) in relation to the formation of a contract, a qualified acceptance by the offeree provides for any or all of the following—

• (a) terms additional to those of the original offer,

• (b) terms different from those of the original offer,

• (c) the omission of terms of the original offer.

• (2) The qualified acceptance (however expressed) is taken to be both—

• (a) a rejection of the original offer, and

• (b) a counter-offer.

• (3) Subsection (2) is without prejudice to section 2(2).

Rejection of offer

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On the rejection of an offer (whether or not an irrevocable offer) in relation to the formation of a contract, the offer lapses.

Withdrawal of offer or acceptance

Withdrawal of offer or acceptance

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In relation to the formation of a contract—

• (a) an offer, whether or not an irrevocable offer, may be withdrawn by the offeror if notification of the withdrawal takes effect before, or at the same time as, notification of the offer takes effect, and

• (b) an acceptance may be withdrawn by the offeree if notification of the withdrawal takes effect before, or at the same time as, notification of the acceptance takes effect.

Time limits

Time limits

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• (1) In relation to the formation of a contract, notification of acceptance of an offer is only effective if it occurs—

• (a) before the expiry of any period of time specified in the offer, or

• (b) if no period of time is specified in the offer, within a reasonable time after the notification of the offer has taken effect.

• (2) Notification of acceptance of an offer occurs when—

• (a) in the case of section 7(1)(a), the statement in question reaches the offeror,

• (b) in the case of section 7(1)(b), the offeror is aware, or ought to be aware, of the conduct in question.

• (3) Performance of an act as described in section 3(1) is effective only if it is begun before the expiry of any period of time mentioned in subsection (1).

• (4) Sections 13(3) and (4) apply for the purposes of subsection (2)(a) as they apply for the purposes of section 13(1).

Commencement of a period of time within which a response to an offer is required

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• (1) Subsection (2) applies where, in relation to the formation of a contract, the terms of an offer—

• (a) stipulate that the offeree must respond to the offer within a period of time, but

• (b) do not make clear when the period is to begin.

• (2) The period begins on the taking effect of the notification of the offer.

Notification

When notification takes effect

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