3.5.1.1. Protection against mistake
The protection of the donor in case of mistake extends to all donations, including donations in a market context. As a rule, the donor may therefore avoid the donation if this donation was concluded because of a mistake. This mistake may refer to the lack of intention to benefit the person who has received the benefit; the qualities and identity of the subject matter of the donation; and if the donor was acting under the mistaken belief that he was legally obliged to donate. If the mistake is proven, several remedies are available to the donor, the most relevant being the condictio indebiti, “a term which is still commonly used in Scotland
583 Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc. [2013] UKSC 3, para 47, where Lord
Hope DPSC (with whom Lord Reed and Lord Carnwath agree) has declared that “the proposition that the court can equitably adjust a contract on the basis that its performance, while not frustrated, is no longer that which was originally contemplated is not part of Scots law. To hold otherwise would be to undermine the principle enshrined in the maxim pacta sunt servanda which lies at the root of the whole of the law of contract”.
584 See Muir v Wood And Another (1970) SLT (Notes) 12, and the conclusions drawn by Lord Kissen based on
the liability of a parent to a person who was injured by a gun he gave to his son. The relevant cases are: Donaldson v. McNiven [1952] 1 All ER 1213, Newton v. Edgerley [1959] 3 All ER 337, and Gorely v.
Codd [1966] 3 All ER 891.
to denote an action having for its object the recovery of money paid under the mistaken belief
that it was due”586. Consequently, it is possible to find authority specifically on the provision
of a gratuitous benefit mistakenly given to one person, when it was intended to benefit
someone else. One such case is Costin v Hume587, where money was sent in error to one
person, when it was intended to benefit another. In this case, it was held that the real beneficiary had a title to sue the receiver of the gift, in order to recover the benefit.
3.5.1.2. Protection against unfair exploitation
When entering into a donation, each party must have full capacity to act by himself or for his own benefit. However, there are certain limitations on the contractual capacity to
donate588. These limitations are specific to the law of donation, due to the ability of donation
to impoverish the donor. The central principle holds that there should be no intervention in the affairs of an adult, but in the case of persons labouring under mental derangement or
adults with incapacity589, their actions are not regarded as valid unless validated by a
responsible person590. In respect of corporate bodies and legal persons, one of the main
players in the market, the capacity to make (and/or receive) donations depends on the constitutional documents of the relevant corporate body or legal person. The purpose for which the legal body or legal person has been constituted is also relevant when evaluating their capacity to enter into gratuitous juridical acts, as well as the extent of the powers
provided to them in the moment of incorporation591.
The limitations imposed on relevant categories of relationship between donor and donee are mainly concerned with cases where the donee is in a ‘position of trust’. If the donee is in a position of trust, the irrevocability of the donation is tainted, and the donor holds the right to seek reduction of the donation. It is presumed by Scots law that, if a donee is in a position of trust towards the donor, he may have been unfairly influenced to donate. The main focus
of this rule is placed on the action of persons such as doctors or clergymen592. In respect of
586 W Gloag, The Law of Contract (2nd ed 1929) p 60. 587 Costin v Hume 1914 SC 134.
588 W Gloag, The Law of Contract (2nd ed 1929) p 91.
589 The Adults with Incapacity (Scotland) Act 2000, s 1(6) defines “adult” as the person who has attained the
age of 16, and “incapable” as someone that is “incapable of (a) acting; or (b) making decisions; or (c) communicating decisions; or (d) understanding decisions; or (e) retaining the memory of decisions”.
590 Adults with Incapacity (Scotland) Act 2000, s 1(7). 591 Companies Act 2006 s 42.
592 W Gloag, The Law of Contract (2nd ed 1929) p 256, refers to “persons, such as doctors and clergymen who
commercial influence on the decisions of the donor, the influence of persons who may abuse their status and influence an otherwise non-willing donor to donate for their benefit, is yet to be tested in court. Finally, it is also worth mentioning that some relationships give rise to a right for the donor to seek reduction of the donation. These relationships are not exhaustively listed in Scots law, but donations to other persons deemed in a ‘position of
trust’ (or in “a fiduciary or quasi-fiduciary relationship”593) are deemed potentially tainted
by the abuse of a position of trust594, and are therefore capable of being reduced.
3.5.1.3. Right to enforce delivery
In Scots law, the right to enforce performance is regulated under the general rules for enforcing the performance of obligations, as guided by the principle ubi jus ibi remedium
(wherever there is a right there is a remedy)595. This same principle applies to obligations
constituted by bilateral or unilateral gratuitous juridical act, where the discharge of an obligation to give in the future may be enforced in court. The right to enforce the delivery of a gratuitous obligation is one of the cornerstones of the protection provided by Scots law to donations in the market context – it provides security to the donee, who knows that if delivery does not occur, he is able to enforce it in court.
It is worth highlighting that, in Scotland, courts have refused to enforce or to award damages for the breach of an agreement which is directly connected with a purely social or family matter. This behaviour may be explained by the essence of family relationships, where family members often interact with each other without the intention to legally bind
themselves596, and therefore, courts avoid having to provide the pursuer with a legal remedy
for the breach of an agreement which was not intended by the parties to be legally binding.
593 Expression used in more recent decisions, one such case is Forbes v. Forbes Trustees 1957 SLT 346, para
350.
594 One such case is the Lord Ordinary’s (Maxwell) opinion, as expressed in Rodgers v Sharp 1979 SLT 177,
para 227, where he declares himself “quite out of keeping with the general approach of our law to confine the principle to some artificial list of relationships and I see no reason why, nowadays, when so much work, which was in former times done by law agents as general “men of business”, has been taken over by specialist advisers such as accountants, the principle should not be applied to them”. This declaration follows a line of other authoritative decisions such as Johnston v Goodlet (1868) 6 M 1067; and Ross v Gosselin's Executors 1926 SLT 239.
595 Lord Carloway, “Court of Session Practice” (reissue 2006) SME, 3, para 56.
596 R Black, “Obligations” (1996) SME, 15, para 657, referring to Forbes v Eden (1865) 4 M 143; Aitken v
Associated Carpenters and Joiners of Scotland (1885) 12 R 1206; Skerret v Oliver (1896) 3 SLT 257; Anderson v Manson 1909 SC 838; Drennan v Associated Ironmoulders of Scotland 1921 SC 151; and Bell v Trustees
The relevance of the above-mentioned decisions, where the courts have refused to recognise the interest to sue, are not directly connected to donations. Instead, they are connected with rights under the rules of voluntary associations of different kinds (such as clubs, trade unions or churches). This means that the application of this authority to donation is yet to be tested in court. But it is possible to argue that, even if tested in court, these exceptions would not be applicable to donations made in a market context. This opinion is based in the fact that
the reason for non-enforcement of the gratuitous obligations in Forbes v Eden597, Anderson
v Manson598, or Bell v Trustees599, has been justified by the context where they were made: as part of the intimate or private lives of the parties.