The Contracts (Rights of Third Parties) Act 1999 (the Act) is a piece of legislation in the United Kingdom that sets out the rights of third parties in contracts. The Act provides a legal framework for these parties to enforce contractual terms and receive remedies for breach of contract.
The Act applies to contracts entered into after 11 May 2000 and provides that third parties may enforce a term of a contract if the contract expressly provides for this. This means that if a contract includes a provision that allows a third party to benefit from some of its terms, that third party can enforce those terms against the contracting parties.
However, the Act only applies if the contract expressly provides for it. If the contract does not contain such a provision, then the third party cannot enforce it. This means that it is important to include specific language in the contract to allow third-party rights.
The Act also provides that a third party`s rights under a contract cannot be varied or rescinded without their consent. This means that if there is a change to the contract, the third party must be notified and must agree to any changes.
In addition, the Act sets out specific circumstances where a third party can enforce a contract term, such as where the contract expressly identifies the third party by name or where the third party is a member of a class of persons identified in the contract.
However, there are some exceptions where the Act does not apply. For example, the Act does not apply to contracts of employment or to contracts for the sale of land.
Overall, the Contracts (Rights of Third Parties) Act 1999 is an important piece of legislation that provides third parties with a legal framework to enforce contractual terms and receive remedies for breach of contract. It is important to ensure that contracts include specific language to allow for third-party rights and to be aware of the circumstances where the Act does not apply.