MSPs agree the general principles of the Contract (Third Party Rights) (Scotland) Bill

12.05.2017

Holyrood’s Delegated Powers and Law Reform Committee (DPLR) has recommended the general principles of the Contract (Third Party Rights) (Scotland) Bill be approved.

Provision for third party rights is currently recognised in Scots Law under the common law doctrine jus quaesitum tertio or JQT. This allows parties to a contract to create an enforceable right in favour of a third party. 

The general aim of the Bill is to provide a new statutory framework with clearer, more usable rules on third-party rights. The Bill seeks to put the common law position on a statutory footing.

The Committee’s report on the general principles of the Bill notes widespread consensus in support of the legislation. The report, however, notes a number of suggestions from stakeholders as to how the law could be made clearer.

John Scott MSP, Convener of the Scottish Parliament’s Delegated Powers and Law Reform Committee said:

“This Bill should deliver the flexibility and certainty that has been sought in this area of law. It is clear there is consensus and universal support for the aims of the Bill amongst the stakeholders that the Committee heard from.

“There is potential for this Bill to be a useful tool for legal practitioners and their clients. There are a number of points however, where stakeholders have suggested the clarity of the Bill could be improved and the Committee would welcome the Scottish Government’s reflections on these.”

Background information

This is a Scottish Law Commission Bill. Although this is a reform to a technical area of law, its provisions will affect a broad spectrum of society, not just the legal fraternity.

Evidence was taken from law bodies, legal practitioners representing financial, construction and agriculture interests, academics, architects, arbitrators, the Scottish Law Commission and the Scottish Government.

The Bill implements the legislative recommendations contained in the Scottish Law Commission’s Review of Contract: Report on Third Party Rights (SLC No 245; July 2016). The Report was published as part of the SLC‘s wider review of contract law.