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The bill was introduced to the house of lords in december 1998, and moved to the house of commons on 14 june 1999 It received royal assent on 11 november 1999, coming into force immediately as the contracts (rights of third parties) act 1999. The old general rule was that only a party to a contract could enforce its terms Anyone else (a “third party”) could not
The contracts (rights of third parties) act 1999 (“the act”) changed this by enabling third parties, in certain cases, to enforce terms in contracts made in their favour. The contracts (rights of third parties) act 1999 clause defines whether third parties—those not directly involved in the contract—can enforce terms of the agreement. This chapter discusses the principal english statutory exception to the privity rule, namely, the contracts (rights of third parties) act 1999 It discusses the history of this legislative reform and the key statutory provisions that must be satisfied for a third party to enforce the contract.
The act requires that for a third party to be able to sue on a contract, the contract must expressly confer a benefit on them or otherwise if the contract must not prevent the third party bringing a claim. A brief summary of the principles, recent developments and practical tips relating to the contracts (rights of third parties) act 1999. Under s.1 of the 1999 act a third party can enforce a contractual term where (inter alia) the term purports to confer a benefit on them unless, on a proper construction of the contract, it appears that the parties did not intend the term to be enforceable by the third party. The enactment of crtpa 1999 provided convenience to contractual parties who wished for a third party to be able to enforce the contract, and if otherwise, the parties were free to expressly exclude the application of the act.
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