The missives of sale, in Scots property law, are a series of formal letters between the two parties, the Buyer and the Seller, containing the contract of sale for the transfer of corporeal heritable property (land) in Scotland. The term 'land' in this article includes buildings and other structures upon land.Land Registration (Scotland) Act 2012 s.113, meaning of land.
Example missives are available to view on the Law Society of Scotland and Property Standardisation Group websites.
The missives of sale form the first of three stages required to validly transfer ownership of land in Scotland. The three stages are:
The Contractual Stage (The Missives of Sale) The Conveyancing Stage The Registration Stage
Principles of the contract and conveyance stages
Traditio legal system The contractual stage or missives of sale only create binding personal obligations (and their respective personal rights) which are enforceable under the law of obligations (Scottish contract law). These obligations are usually among other things, an obligation on the Seller to grant a disposition transferring ownership and an obligation for the Buyer to pay the purchase price and an obligation for the Buyer to take delivery of the granted disposition.
The obligations under a contract are personal rights, rights in personam, so the contract alone does not create or transfer the real right of ownership in itself.Stair Memorial Encyclopaedia, Vol 18, Property, Ch 13, Transfer of Ownership, para 642. This is because Scots law follows the principle that traditionibus non nudis pactis dominia rerum transferuntur: ownership is transferred by delivery (or other conveyance) and not by bare contract.Stair Memorial Encyclopaedia, PROPERTY - PART I: GENERAL LAW (Volume 18), Ch. 13. TRANSFER OF OWNERSHIP, para 606.
Abstract legal system Only a conveyance, as a separate legal act, can effect the transfer agreed to under the contract between the parties. As well as being a traditio system, Scots law also uses the principle of 'abstraction', meaning the conveyance does rely on the cause of the transfer.
In Scots law the recognised causa for transfers of land are:
Contract Gift Exchange of land (called a Contract of Excambion) Transfer in trust, expressly or otherwise
The validity of the conveyance (the transfer of property) does not depend on the validity of the cause of the transfer as Viscount StairViscount Stair is an institutional writer and as such is an authoritative source of law in Scots law. describes:"We do not follow that subtility of annulling deeds, because they are sine causa… and therefore narratives expressing the cause of the disposition, are never inquired into, because, though there were no cause, the disposition is good.’Stair, II, 3.14.Therefore, Scotland differs from common-law jurisdictions such as England & Wales by requiring a conveyance stage as well as the formation of a contract. While a conveyance may be valid irrespective of the contract, the reasons for the contract's invalidity may also extend to invalidate the conveyance as a vitium reale. This can arise in certain cases of fraud or where the Seller lacks capacity.T. B. Smith, 'Error and transfer of title' (1967) The journal of the Law Society of Scotland.
Stage one of voluntary transfer of land: the missives of sale The first stage of a voluntary transfer of land, as described above, is typically contractual in nature, where parties negotiate the formal contract of sale between the owner (the Seller) and the Buyer. In Scots law, this contract is known as the missives of sale and typically are a series of formal letters with each parties offers and qualifications (containing conditions needed to be complied by either party). With the corporeal heritable property, the nature of its property's usage will reflect on the missives of sale, especially where the property is residential or commercial property.
Requirements of written contract Under the Requirements of Writing (Scotland) Act 1995, a written document is required for the creation of a contract for transfer, variation or extinction of a real right in land.Requirements of Writing (Scotland) Act 1995 section 1(2(a(i))). As ownership is a real right, a written contract is required. Unlike common contracts, which form one single document, the contract is laid out across multiple letters, the missives. The missives of sale can be considered a valid written contract because the buyer has made an offer in one document and the seller has accepted in another.Requirements of Writing (Scotland) Act 1995 s.2(1(2)).
A person cannot make a contract orally or by any other means in relation to the sale of heritable property, other than by writings subscribed by the granter (i.e.: the Seller in the missives of sale)Requirements of Writing (Scotland) Act 1995 s.2(1) or through the use of electronic documents compliant with section 9B of the 1995 Act.Requirements of Writing (Scotland) Act 1995 s.9B
Electronic documents A contract is capable of being formed by electronic documents, such as by e-mail, if they are validly executed under s.9B of the Requirements of Writing (Scotland) Act 1995. This electronic document must be authenticated by the party sending it (i.e.: the Buyer/Seller) and meet any requirements made by the Scottish Ministers, the legal name for the Scottish Government.Requirements of Writing (Scotland) Act 1995 s.9B(1(a)). Authenticated means:"Requirements of Writing (Scotland) Act 1995 Section 9B
(2) An electronic document is authenticated by a person if the electronic signature of that person—
(a) is incorporated into, or logically associated with, the electronic document,
(b) was created by the person by whom it purports to have been created, and
(c) is of such type, and satisfies such requirements (if any), as may be prescribed by the Scottish Ministers in regulations."The Scottish Government has introduced regulations for electronic documents under the Electronic Documents (Scotland) Regulations 2014 (SSI 2014/83). Under the 2014 Regulations, only an "advanced electronic signature" is capable of being an electronic signature, which requires "sophisticated technology" and must comply with the Electronic Signature Regulations 2002. Solicitors in Scotland have access to advanced electronic signature technology through their Law Society of Scotland smartcard so can execute these documents on their client's behalf.
Formation of missives of sale In Scots law, a contract is created when an offer from one party is accepted by another party (sometimes coined as 'offer + acceptance = contract'). However, as discussed above, this contract must be done in writing where it involves the transfer of ownership under the Requirements of Writing (Scotland) Act 1995.
Conditional offers A Buyer will often include conditions that have to be met in his offer in the missives. In residential property, this is usually done by incorporating the Scottish Standard Clauses (see below) into the offer, which includes such conditions such as having sight of reports on the property or the inclusion of any moveable property (such as white goods) in the sale of the property. Such conditions may be suspensive, which will prevent the creation of a legally binding contract until the conditions are complied with.
Qualified acceptance A Seller of property can accept the Buyer's offer to buy outright as a de plano acceptance. However, it is usually common practice to qualify an acceptance by the making of further conditions. Where a seller makes a qualified acceptance, Scots law treats this as new offer, an offer to sell, which the Buyer must then accept de plano or issue a new offer to buy with further or amended conditions; the offer to buy is effectively 'destroyed' by the qualified acceptance or offer to sell and cannot be relied upon by the Seller.Wolf and Wolf v Forfar Potato Co 1984 SLT 10 This creates a 'ping pong' effect of a series of offers to sell/offers to purchase between the two parties, also termed missives, with no formally agreed contract until one party accepts the other's offer de plano. The final offer and de plano acceptance letters form the contract of sale in Scots law, hence the contract being called the missives (i.e.: letters) of sale.
Time limits It is possible to qualify an offer to buy/qualified acceptance with a time limits for acceptance where wording is clearly used for the other party to identify the deadline.Littlejohn v Hadwen (1882) 20 SLR 5; Bell Principles s 73; Gloag p 35; W W McBryde The Law of Contract in Scotland (3rd edn, 2007) para 6-57 However, a new counter-offer made within the time limit will 'destroy' the qualified acceptance time limit. Where no time limit is made, the offer or counter-offer will cease for acceptance after the passage of a reasonable time.Thomson v James (1855) 18 D 1 at 10; Stair Institutions I,3,9.
The postal rule When a party accepts the other parties' offer to purchase/offer to sell de plano, it is effective to create a binding contract from the moment it is posted or sent to a document exchange irretrievably (such as DX) not when it is received by the other party. This is due to the application of the doctrine known as the Postal Acceptance Rule in Scots law.Thomson v James (1855) 18 D 1; Henthorn v Fraser 2 Ch 27.
Abolition of the postal acceptance rule The Scottish Law Commission has published a report in 2018 (Report on Review of Contract Law: Formation, Interpretation, Remedies for Breach, and Penalty Clauses, SLC Report 252) recommending the abolition of the postal acceptance rule and its replacement with a new statutory regime, available to view in its draft form on the Scottish Law Commission website. At the time of writing, it remains to be seen whether this draft bill accompanying the report will be introduced into the Scottish Parliament.Response from the Scottish Government Minister for Community Safety, Ash Denham MSP to the 2018 Report. Available at: https://www.scotlawcom.gov.uk/files/8615/4936/1366/Response_from_the_Scottish_Government_to_Reports_on_Contract_Law_Report_No_252_and_Moveable_Transactions_Report_No_249.pdf
Withdrawing an offer to buy/offer to sell There is no requirement to withdraw an offer or qualified acceptance by formal writing under the Requirements of Writing (Scotland) Act 1995.MacMillan v Caldwell 1990 SC 389, 1991 SCLR 73, 1991 SLT 325, OH.
It is not possible in Scots law for a party to withdraw their own qualifications to an offer once these qualifications have been received by the other party, and then to send a new de plano acceptance to the other party's offer in an attempt to create a valid contract which could not have been concluded previously.Rutterford Ltd v Allied Breweries Ltd 1990 SCLR 186, 1990 SLT 249, OH.
In MacMillan v Caldwell,1990 SC 389, 1991 SCLR 73, 1991 SLT 325, OH. NB: This is an Outer House judgment and may be overruled by a subsequent new case in the Inner House or United Kingdom Supreme Court. Lord Kirkwood held that once one of the parties indicated he was no longer prepared to contract, the other party cannot create the contract by accepting de plano an existing offer.1990 SC 38 However, the onus will be on the party who made the offer to prove that timeous notice of withdrawal of the offer was communicated to the other party's agent before any valid acceptance de plano is made.1990 SC 389
Prior communings rule and clauses