The Contracts (Rights of Third Parties) Ordinance (Cap. 623) (the "Ordinance") comes into force on 1 January 2016.

The Ordinance allows a third party to enforce a wide range of contracts, such as standalone confidentiality and settlement agreements. However, the law will not confer any right on a third party to enforce a term of an employment contract against an employee.

Employers should consider revising their employment and employment-related contracts to maximise enforceability by third parties where desirable and expressly contracting out the Ordinance where it is not.