In our recent Law-Now, we explained that the Scottish Law Commission (SLC) has published a Report and draft Contract (Third Party Rights) (Scotland) Bill with proposals for reform of the Scots law of third party rights.

As anticipated, the Bill has been included in the Scottish Government’s Legislative Programme for 2016-2017 which was announced on 6 September 2016.

The Bill will reform, and provide a statutory basis for, the Scots law of contract by which a right enforceable by a third party can be created.

In summary, the Bill will:

  • Set out how a third party right is created;
  • Specify how contracting parties lose any power to modify or cancel a third party right;
  • Provide for the remedies by which a third party can enforce a right, and the defences which might be available against a third party who seeks to enforce a right; and
  • Provide for the situations in which the third party right is affected by an arbitration clause in the principal contract.