The Treaty of Falaise was an agreement made in December 1174 between the captive William I, King of Scots, and Henry II, King of England.
William was captured at the Battle of Alnwick during an invasion of Northumbria and was being held in Falaise in Normandy while Henry sent an army north and took several Scottish castles, including Berwick and Edinburgh. Since he had no heir, William was forced to bargain for release to prevent the end of the Scottish line of kings.
The Treaty required William to swear that Scotland would thereafter be subordinate to the English crown. English soldiers were also to occupy the key Scottish castles of Roxburgh, Berwick, Jedburgh, Edinburgh, and Stirling. Although they were the richest burghs in the kingdom, Scotland would still be heavily taxed to pay for their upkeep. During the next 15 years, William was forced to observe Henry's overlordship, and to obtain permission from the English crown before putting down local uprisings. However, Henry had allowed William to keep the barony of Tynedale, and had returned the earldom of Huntingdon in 1185 (although this was later gifted to William's younger brother David).
The treaty was annulled in 1189 when Richard the Lionheart, Henry's heir, effectively sold southern Scotland back to the Scottish king to help fund Richard's crusade in the Holy Land.