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Contracts (Rights of Third Parties) Act 1999

Consolidated Text As Enacted Cited authorities 33 Cited in Amendments 117 Related
JurisdictionUK Non-devolved
Citation1999 c. 31
Year1999
the contract expressly provides that he may, orsubject to subsection (2) , the term purports to confer a benefit on him.(2) Subsection (1) (b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.(3) The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.(4) This section does not confer a right on a third party to enforce a term of a contract otherwise than subject to and in accordance with any other relevant terms of the contract.(5) For the purpose of exercising his right to enforce a term of the contract, there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and other relief shall apply accordingly) .(6) Where a term of a contract excludes or limits liability in relation to any matter references in this Act to the third party enforcing the term shall be construed as references to his availing himself of the exclusion or limitation.(7) In this Act, in relation to a term of a contract which is enforceable by a third party—
  • “the promisor” means the party to the contract against whom the term is enforceable by the third party, and
  • “the promisee” means the party to the contract by whom the term is enforceable against the promisor.
the third party has communicated his assent to the term to the promisor,the promisor is aware that the third party has relied on the term, orthe promisor can reasonably be expected to have foreseen that the third party would rely on the term and the third party has in fact relied on it.may be by words or conduct, andif sent to the promisor by post or other means, shall not be regarded as communicated to the promisor until received by him.the parties to the contract may by agreement rescind or vary the contract without the consent of the third party, orthe consent of the third party is required in circumstances specified in the contract instead of those set out in subsection (1) (a) to (c) .that his consent cannot be obtained because his whereabouts cannot reasonably be ascertained, orthat he is mentally incapable of giving his consent.(5) The court or arbitral tribunal may, on the application of the parties to a contract, dispense with any consent that may be required under subsection (1) (c) if satisfied that it cannot reasonably be ascertained whether or not the third party has in fact relied on the term.(6) If the court or arbitral tribunal dispenses with a third party’s consent, it may impose such conditions as it thinks fit, including a condition requiring the payment of compensation to the third party.(7) The jurisdiction conferred on the court by subsections (4) to (6) is exercisableF6in England and Wales by both the High Court and the county court and in Northern Ireland by both the High Court and a county court.(1) Subsections (2) to (5) apply where, in reliance on section 1, proceedings for the enforcement of a term of a contract are brought by a third party.arises from or in connection with the contract and is relevant to the term, andwould have been available to him by way of defence or set-off if the proceedings had been brought by the promisee.an express term of the contract provides for it to be available to him in proceedings brought by the third party, andit would have been available to him by way of defence or set-off if the proceedings had been brought by the promisee.by way of defence or set-off any matter, andby way of counterclaim any matter not arising from the contract,(5) Subsections (2) and (4) are subject to any express term of the contract as to the matters that are not to be available to the promisor by way of defence, set-off or counterclaim.(6) Where in any proceedings brought against him a third party seeks in reliance on section 1 to enforce a term of a contract (including, in particular, a term purporting to exclude or limit liability) , he may not do so if he could not have done so (whether by reason of any particular circumstances relating to him or otherwise) had he been a party to the contract.
  • Section 1 does not affect any right of the promisee to enforce any term of the contract.
    • (a) the third party’s loss in respect of the term, or(b) the expense to the promisee of making good to the third party the default of the promisor,(1) Section 1 confers no rights on a third party in the case of a contract on a bill of exchange, promissory note or other negotiable instrument.(2) Section 1 confers no rights on a third party in the case of any contract binding on a company and its members under F1section 33 of the Companies Act 2006 (effect of company's constitution) .(2A) Section 1 confers no rights on a third party in the case of any incorporation document of a limited liability partnership F3or any agreement (express or implied) between the members of a limited liability partnership, or between a limited liability partnership and its members, that determines the mutual rights and duties of the members and their rights and duties in relation to the limited liability partnership.(2A) Section 1 confers no rights on a third party in the case of any incorporation document of a limited liability partnership F3or any agreement (express or implied) between the members of a limited liability partnership, or between a limited liability partnership and its members, that determines the mutual rights and duties of the members and their rights and duties in relation to the limited liability partnership.any term of a contract

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