This Act stated that neither civilians nor soldiers and officers who were in England during peace were subject to military courts or law.

Because the articles of war did not fall under these court's jurisdiction, military law could not be applied to anyone in England, whether soldier or civilian.

(1) The following persons are subject to military law: ... (e) every officer holding a commission in the Territorial Army who is on the active list (as defined by the regulations for the Territorial Army) or on the permanent staff of the Territorial Army, or, being in the Territorial Army reserve, is doing duty with any body of troops for the time being subject to military law or is ordered on any duty or service for which he is liable as an officer of that reserve; (g) every warrant officer, non-commissioned officer and man of the army reserve when called out on permanent service or in aid of the civil power or when undergoing annual or other training (whether in pursuance of an obligation or not), or when otherwise employed in Her Majesty's service as mentioned in paragraph (c) of this subsection; (h) every warrant officer, non-commissioned officer and man of the Territorial Army when embodied or called out for home defence service, when undergoing training or attending drills or parades (whether in pursuance of an obligation or not), or when serving on the permanent staff of the Territorial Army; (i) every person in receipt of a pension in respect of service in the regular forces, or of such service and other service, who is employed in Her Majesty's service as mentioned in paragraph (c) of this subsection; (j) every person not otherwise subject to military law who is serving in any force raised by order of Her Majesty outside the United Kingdom and is under the command of an officer holding a land forces commission or a commission in the Territorial Army;

(k) every member of the Home Guard when on duty (as defined in the Home Guard Act, 1951) or during any period (as so defined) during which the platoon or other part of the Home Guard to which he belongs is mustered (as so defined).A number of regiments of the British Army, most of which are reserve units on Territorial Army lines, based and recruited in British Overseas Territories, although technically falling under the remit and control of the British Government (as national government, whereas the territorial government is strictly a local government to which most areas of internal government have been delegated) exist under acts of local legislatures, requiring clauses of those acts to also apply the Army Act to these units.

(2) When acting with a body of Her Majesty’s regular forces, an officer of the regiment will take rank and precedence below officers of the regular forces of the same or equivalent rank.The Army Act 1881 was renewed by Parliament annually, unless both Houses of Parliament approved a draft Order in Council continuing its life, with amendments or consolidations as required.