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Scotland's new third party rights contract law comes into force

26 February 2018

The legislation restating the rights of third parties under contracts in Scots law comes into force today, 26 February 2018.

Based on recommendations of the Scottish Law Commission, the Contract (Third Party Rights) (Scotland) Act 2017 modernises and removes uncommercial restrictions from the pre-existing common law jus quaesitum tertio.

A third party can be given a right under a contract where an actual party to the contract undertakes in it to do or not do something for the third party’s benefit and the parties to the contract expressly or impliedly intend the undertaking to be enforceable by the third party.

The third party must be identifiable from the contract, either by name or by description, but can be a body still to be brought into existence. They will have the same remedies for any breach of the undertaking as would have been available to a contracting party.

Their rights may be revoked or modified, if not already taken up, or otherwise relied on to the knowledge of the contracting parties.

Click here to see the full terms of the Act.

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