Most Read Contributor in Hong Kong, September 2016
The Contracts (Rights of Third Parties) Ordinance (Cap. 623)
("the Ordinance") came into force on 1 January 2016.
The new legislation applies to most types of contract, with very
limited exceptions. It reforms the privity of contract rule that
only a party to a contract may enforce it. The Ordinance enables
someone who is not a party to a contract to have rights under it,
The contract gives that person an express right to do so;
A contract term purports to confer a benefit on that
If this is not your intention, then action is required. Standard
contract templates should be reviewed to check that appropriate
safeguards, such as an exclusion (where third parties are not
intended to have any enforceable rights) or a restriction (where
third parties are intended to have some enforceable rights) of the
Ordinance are in place. New variations of existing contracts should
also be checked.
At Mayer Brown JSM, we have been active throughout 2015 in
offering guidance on the Ordinance. We would be pleased to discuss
your contracting arrangements as they may be affected by the new
Please see our earlier legal updates for further reference:
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Mayer Brown International LLP, a limited liability partnership
incorporated in England and Wales; Mayer Brown JSM, a Hong Kong
partnership, and its associated entities in Asia; and Tauil &
Chequer Advogados, a Brazilian law partnership with which Mayer
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This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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