Trusts and Succession (Scotland) Act 2024

38 Contractual rights

(1) Subsection (2) applies where, acting intra vires, the trustees enter into an onerous contract with a person who, at the time the contract is entered into, is aware (whether or not by virtue of having been so informed by the trustees) that the trustees are entering into the contract in their capacity as trustees.

(2) Subject to subsections (3) and (4) and except in so far as the contract otherwise provides, any rights of the person under the contract are enforceable against the trust property only.

(3) Subsection (4) applies where—

(a) a person has a contractual right enforceable against the trustees’ private property, but

(b) the trustees have a right of relief against the trust property in respect of any finding against the trustees’ private property.

(4) The person may elect to enforce the right against the trustees’ private property or directly against the trust property (liability being joint and several).

(5) Subsection (6) applies where, acting ultra vires (and whether or not purporting to be acting intra vires), the trustees enter into an onerous contract with a person.

(6) Any rights of the person under the contract—

(a) are not enforceable against the trust property, but

(b) if the person enters into the contract in good faith, are enforceable against the trustees’ private property.

(7) This section applies—

(a) irrespective of when the trust was created, but

(b) only as respects a contract entered into after the section comes into force.