Bermuda Proposes To Introduce Third Party Contractual Rights

The Contracts (Rights of Third Parties) Act 2016 (Bill) was introduced into the Bermuda House of Assembly on 4 March 2016. The Bill introduces changes to the common law rule of "privity of contract", under which a person can normally only enforce a contract if he is a party to it. The Bill is currently scheduled for a second reading in the House of Assembly.

The Bill, if adopted, would allow, subject to certain exceptions, a third party to enforce contractual terms in its own right where:

• the third party is expressly identified in the contract by name, as a member of a class or as answering a particular description (and a third party may include a person not in existence when the contract is entered into); and