chapter  4
Enforcement of sustainability contractual clauses in supply chains by third parties
WithKateřina Mitkidis
Pages 24

Using commercial contracts to manage CSR within international supply chains has become a widespread practice. Sustainability contractual clauses (SCCs) are often disconnected from the contract’s subject matter and protect primarily the interests of third parties, such as suppliers’ employees, inhabitants of the contract performance location, other businesses or simply the general public. While the use of contracts has been associated with some improvements in the sustainability performance of international supply chains, enforcement remains a major problem. First, the will of the contractual parties to legally enforce SCCs is often lacking. Second, even if the will is present, traditional contractual remedies are not suitable for the enforcement of SCCs. The result is that while we have a contract to impose sustainability requirements throughout international supply chains, the protected third parties’ interests stay vulnerable, as the contractual provisions are not (or cannot be) effectively enforced. This situation has inspired attempts to break the privity of contract and enforce those provisions using various contract standings, namely third-party beneficiaries or unilateral contract claims. The chapter reviews these third parties’ efforts, looking into legal scholarship and available case law from various jurisdictions, in order to analyse whether there is a realistic possibility for successful enforcement of SCCs by third parties.