Contract Acts Definition

Contracts (Rights of Third Parties) Act 1999

This enactment came fully into force in May 2000.

It enables someone who is not a party to a contract – a third party – to sue either party to the contract where the contract expressly gives him the right to enforce a particular provision or the provision shows an intention to benefit him. The Act also allows a third party to use any defence which the contract makes available to him, e.g. to an action by either party in tort.

The parties can agree in the contract to exclude the Act, and many if not most construction agreements do this.

The Act was originally seen as an instrument for replacing collateral warranties, but warranties continue to flourish.