Scots law contracts - new third party rights law in force from 26 February

Scotland

The Scottish Parliament has now passed subsidiary legislation to bring The Contracts (Third Party Rights) (Scotland) Act 2017 fully into force with effect from 26 February 2018.

The Act implements the recommendations of the Scottish Law Commission to codify and remove uncommercial restrictions from the existing Scots common law ‘jus quaesitum tertio’ to allow parties to a contract to confer a right or immunity from liability on a person/entity who is not a party to the contract (a ‘third party').

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 that third party’s benefit and the contracting parties intend that the third party should be entitled to enforce the undertaking. That intention can be express or implied. For more information read our previous LawNow on the Act.