[1] Example missives are available to view on the Law Society of Scotland and Property Standardisation Group websites.
[2] The missives of sale form the first of three stages required to validly transfer ownership of land in Scotland.
[3] 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.
The validity of the conveyance (the transfer of property) does not depend on the validity of the cause of the transfer as Viscount Stair[6] describes:[7]"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.’[8]Therefore, Scotland differs from common-law jurisdictions such as England & Wales by requiring a conveyance stage as well as the formation of a contract.
[9] 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.
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.
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.
[29] At common law, following Winston v Patrick,[30] the delivery of a disposition supersedes any personal obligations in the contract, even if collateral in nature.
The Contract (Scotland) Act 1997 altered this common law rule, so that the missives are no longer superseded by the disposition.
However, it is common for the Seller's initial response to be a qualified acceptance in order to avoid creating a binding missives of sale at an early stage.
[45] The Law Society of Scotland's Property Committee has built on this work which culminated with the publication of the Scottish Standard Clauses.
[46] Today, the Scottish Standard Clauses have effectively become the "national Conditions of Sale"[47] despite its recent completion in December 2014, and commencement of usage on 5 January 2015.
The Scottish Standard Clauses are registered as a public document in the Books of Council and Session for all solicitors in Scotland to incorporate them into the missives of sale to simplify the process.
As such, the missives of commercial property may have numerous conditions and complex terms, leading to a large amount of contractual negotiations.
The Property Standardisation Group was formed by four law firms, CMS (formerly known as Dundas & Wilson), Dentons (formerly known as Maclay Murray & Spens), Pinsent Masons (formerly known as McGrigors), and Shepherd and Wedderburn in 2001 in a combined effort to produce common agreed styles (templates) for transactions of commercial heritable property in Scotland.
[52] The winning bidder at the roup, signs a minute of enactment and preference to bind himself to the pre-prepared contract and becomes the Buyer.
[59] The warrant also covers that the Seller's right of ownership (title) is absolutely good, and not voidable or excluded from the Keeper of the Register of Scotland's indemnity.
[60][61] Hume, the institutional writer, and source of law in Scotland, says the Seller must also furnish the Buyer with evidence that the title is good.
An example of this can be commonly found in case law where the Seller contracts to transfer the entire land, that is to say a coele usuque ad centrum (from the heavens to the centre of the Earth) but the mineral rights, found in the strata of the land as a separate conventional tenement, are not owned by the Seller but by a third party but would be warranted to be transferred to the Buyer.
Following Holms v Ashford Estates Ltd,[64] it is settled that a warrant that the land transferred is fit for the purpose the Buyer has informed the Seller it was to be used does not fall within this warranty.
Older legal authorities from the 16th and 17th century Kingdom of Scotland courts appear to suggest that the implied warranty does not cover leases.
However, there is academic criticism that this decision was incorrect, and remains a first instance judgment of the Outer House of the Court of Session.
[73] It was established definitively in 1835 that real conditions, such as servitudes and burdens, were covered by the absolute warranty made by the Seller.
The fourth warranty guarantees that the Seller will take no future acts that would prejudice the Buyer's contractual right to ownership.
[82] As such the efficacy of warrandice as a legal remedy for Buyers later discovering latent defects in the property's title is limited.
It is a sufficient ground of exception to the title if it be liable to challenge"[83] However, there are qualifications to the rule, such as a requirement that an action of ejection has been raised against the Buyer.
Contrary to wide belief by conveyancers,[84] there is no requirement for ejection to enforce a warranty found in the Missives of Sale.
However, in practice, a remedy for damages without rescinding the Missives is provided for in the terms of the Missives of Sale itself, this contractual provision follows the Roman law contractual remedy, the actio quanti minoris, which allows claims that where there has been a breach of contract by the seller, the Buyer is entitled to retain the property and claim damages based on a diminution in the value of the property.
A statutory personal bar exists in Scots law in relation to written contracts, similar to the concept of esoppel in other jurisdictions.
As always in Scots civil law, the first person must prove the above statutory burden of proof on the balance of probabilities that it occurred.