5 Things you need to know about 3rd Party Rights:
1. Scots law has always provided for third parties to be able to enforce contractual rights between others. This was called ius quaesitum tertio (“IQT").
2. IQT was quite complex and difficult to identify and enforce on occasion –especially with regard to IQT created by implication.
3. This has changed following the coming into force of The Contract (Third Party Rights) (Scotland) Act 2017 on 26 February 2018. This brings Scots law in line with English law.
4. The new statutory framework replaces IQT and applies to all contracts entered on or after 26 February 2018. The Act does not have retrospective effect and does not affect existing contracts.
5. There are specific conditions that have to be met for a third party right to be created under the Act. The parties to a contract may exclude third party rights by adding a clause to that effect in relevant contractual documents.
