In October 1332, Sir Archibald Douglas, Guardian of Scotland made a truce with Balliol, supposedly to let the Scottish Parliament assemble and decide who their true king was.
Emboldened by the truce, Balliol dismissed most of his English troops and moved to Annan on the north shore of the Solway Firth.
In the early morning hours of 16 December 1332, a considerable contingent of Bruce loyalist troops led by Sir Archibald Douglas, John Randolph, 3rd Earl of Moray, Robert Stewart, and Simon Fraser, 1st Laird of Lovat made a surprise attack on Balliol.
Most of Balliol's men were killed, though he himself managed to escape through a hole in the wall and fled naked on horse to Carlisle, over the border in England.
Edward's younger brother Henry Balliol died as a result of injuries sustained at the battle of Annan.