Formation of Contract

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Formation of contract, requirements of writing and personal bar (formative written exercise)

The main point of this scenario is whether Alana, the previous inhabitant of the home, and Edwina, the current inhabitant, had formed a contract whereby the right of ownership had been passed over to Edwina. After two days of Edwina living in the house she received a letter from Alana telling her they had not formed a contract and that she would have to leave the premises. Over the course of this essay Edwina’s position will be discussed and advise as to what to do next will be given.

Alana will argue that a contract had not been formed under the argument that she had not signed her typed statement, which is necessary to constitute a contract. Section 1 (2)(a)(i) of the requirements of writing (Scotland) act 19951 states that a written document subscribed by both the parties is necessary to constitute a contract or unilateral obligation for the creation, transfer, variation or extinction of a real right in land. Thus, the lack of signature from both parties means no contract has been formed. Alana still sees the property as her own thus believes she still has authority over the land.

Edwina on the other hand will argue that the contract had been concluded. In accordance with section 1 (3) of the requirements of writing (Scotland) act 1995 the way in which she has approached the situation and responded to the verbal agreement with the (assumed) exchange of money and the spending of money on the moving expenses then the contract should hold (in line with section 1 (4) ). From Edwina’s point of view she will see the contract as legally binding as her offer was followed by Alana’s acceptance and from here Edwina has spent more of her money to facilitate the moving process.

Under the assumption that Edwina has paid for the property the House of Lords ruled on a similar case of Sharp v Thomson saying that “a person who has made delivery of a conveyance and...
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