6Lapsing of offer on fundamental change of circumstances(1)

An offer in relation to the formation of a contract lapses on a fundamental change of circumstances and having lapsed can no longer be accepted.

(2)

Without prejudice to the generality of subsection (1), there is a fundamental change of circumstances if, after the offer is made but before a contract is formed, the offeror or offeree—

(a)

dies, or

(b)

becomes incapable of making any decision as to whether to form the contract.

(3)

But an offer such as is mentioned in subsection (1) does not lapse where, after it is made but before a contract is formed, the offeror or offeree becomes insolvent.

(4)

For the purposes of subsection (3)—

(a)

an offeror or offeree who is an individual, or the estate of which may be sequestrated by virtue of section 6 of the Bankruptcy (Scotland) Act 2016, becomes insolvent when—

(i)

that person’s estate is sequestrated,

(ii)

that person grants a trust deed for creditors or makes a composition or arrangement with creditors,

(iii)

a voluntary arrangement proposed by that person is approved,

(iv)

that person’s application for a debt payment programme is approved under section 2 of the Debt Arrangement and Attachment (Scotland) Act 2002, or

(v)

that person becomes subject to any other order or arrangement analogous to those mentioned in sub-paragraphs (i) to (iv) anywhere in the world, and

(b)

an offeror or offeree other than is mentioned in paragraph (a) becomes insolvent when—

(i)

a decision approving a voluntary arrangement entered into by that person has effect under section 4A of the Insolvency Act 1986 (“the 1986 Act”),

(ii)

that person is wound up under Part 4 or 5 of the 1986 Act or under section 367 of the Financial Services and Markets Act 2000,

(iii)

a receiver is appointed, under section 51(1) or (2) of the 1986 Act, over all or part of the property of that person,

(iv)

that person enters administration (“enters administration” being construed in accordance with paragraph 1(2) of schedule B1 of the 1986 Act), or

(v)

that person becomes subject to any other order or arrangement analogous to those mentioned in sub-paragraphs (i) to (iv) anywhere in the world.

(5)

Subsections (1) to (4) are without prejudice to the application of any relevant enactment, or rule of law, in relation to the transaction with regard to which the offer is made.

(6)

The Scottish Ministers may, by regulations subject to the affirmative procedure—

(a)

amend subsection (4)(a) or (b),

(b)

specify further circumstances in which a person becomes insolvent for the purposes of subsection (3).

(7)

In subsection (2)(b), “incapable” has the meaning given to that expression by section 1(6) of the Adults with Incapacity (Scotland) Act 2000.