In the 14th century Norway still treated Orkney and Shetland as a Norwegian province, but Scottish influence was growing, and in 1379 the Scottish earl Henry Sinclair took control of Orkney on behalf of the Norwegian king Håkon VI Magnusson.[6] In 1348 Norway was severely weakened by the Black Plague and in 1397 it entered the Kalmar Union. With time Norway came increasingly under Danish control. King Christian I of Denmark and Norway was in financial trouble and, when his daughter Margaret became engaged to James III of Scotland in 1468, he needed money to pay her dowry. Apparently without the knowledge of the Norwegian Riksråd (Council of the Realm) he entered into a contract on 8 September 1468 with the King of Scots in which he pawned Orkney for 50,000 Rhenish guilders.[7] On 28 May the next year he also pawned Shetland for 8,000 Rhenish guilders.[8] He secured a clause in the contract which gave future kings of Norway the right to redeem the islands for a fixed sum of 210 kilograms (460 lb) of gold or 2,310 kilograms (5,100 lb) of silver. Several attempts were made during the 17th and 18th centuries to redeem the islands, without success.[9]
Following a legal dispute with William, Earl of Morton, who held the estates of Orkney and Shetland, Charles II ratified the pawning document by a Scottish Act of Parliament on 27 December 1669 which officially made the islands a Crown dependency and exempt from any "dissolution of His Majesty’s lands". In 1742 a further Act of Parliament returned the estates to a later Earl of Morton, although the original Act of Parliament specifically ruled that any future act regarding the islands status would be "considered null, void and of no effect".