Contracts (Rights of Third Parties) Act 1999
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The Contracts (Rights of Third Parties) Act 1999 (c. 31) is an Act of the
Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprema ...
that significantly reformed the common law doctrine of privity and "thereby emovedone of the most universally disliked and criticised blots on the legal landscape".Dean (2000) p.143 The second rule of the doctrine of privity, that a third party could not enforce a contract for which he had not provided
consideration Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. The court in ''Currie v Misa'' declared ...
, had been widely criticised by lawyers, academics and members of the judiciary. Proposals for reform via an act of Parliament were first made in 1937 by the Law Revision Committee in their Sixth Interim Report. No further action was taken by the government until the 1990s, when the Law Commission proposed a new draft
bill Bill(s) may refer to: Common meanings * Banknote, paper cash (especially in the United States) * Bill (law), a proposed law put before a legislature * Invoice, commercial document issued by a seller to a buyer * Bill, a bird or animal's beak Plac ...
in 1991, and presented their final report in 1996. The bill was introduced to the
House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...
in December 1998, and moved to the
House of Commons The House of Commons is the name for the elected lower house of the bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of parliament. ...
on 14 June 1999. It received
royal assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in other ...
on 11 November 1999, coming into force immediately as the Contracts (Rights of Third Parties) Act 1999.


Background

The historical doctrine of privity consisted of two rules. The first was that a third party may not have obligations imposed by the terms of a contract, and second was that a third party may not enforce a contract for which he has not provided
consideration Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. The court in ''Currie v Misa'' declared ...
.McKendrick (2007) p. 137 The first rule was not contested, while the second was described as "one of the most universally disliked and criticised blots on the legal landscape". Originally, the second rule was not held to be valid. In the 17th century, a third party was allowed to enforce terms of a contract that benefited him, as shown in ''
Provender v Wood Fodder (), also called provender (), is any agriculture, agricultural foodstuff used specifically to feed domesticated livestock, such as cattle, domestic rabbit, rabbits, sheep, horses, chickens and pigs. "Fodder" refers particularly to food g ...
''
627 __NOTOC__ Year 627 ( DCXXVII) was a common year starting on Thursday of the Julian calendar. The denomination 627 for this year has been used since the early medieval period, when the Anno Domini calendar era became the prevalent method in Eur ...
Hetley 30, where the judgement stated that "the party to whom the benefit of a promise accrews, may bring his action".Flannigan (1987) p. 564 The first reversal of this law came in ''
Bourne v Mason Bourne may refer to: Places UK * Bourne, Lincolnshire, a town ** Bourne Abbey ** Bourne railway station * Bourne (electoral division), West Sussex * Bourne SSSI, Avon, a Site of Special Scientific Interest near Burrington, North Somerset * Bourn ...
''
669 __NOTOC__ Year 669 ( DCLXIX) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. The denomination 669 for this year has been used since the early medieval period, when the Anno Domini calendar era ...
1 Vent., where the
Court of King's Bench The King's Bench (), or, during the reign of a female monarch, the Queen's Bench ('), refers to several contemporary and historical courts in some Commonwealth jurisdictions. * Court of King's Bench (England), a historic court court of common ...
found that a third party had no rights to enforce a contract that benefited him. This ruling was quickly reversed, and decisions immediately after used the original rule. Over the next 200 years, different judges provided different decisions as to whether or not a third party could enforce a contract that benefited them. The dispute ended in 1861 with ''
Tweddle v Atkinson is an English contract law case concerning the principle of privity of contract and consideration. Its panel of appeal judges reinforced that the doctrine of privity meant that only those who are party to an agreement (outside of one of the wel ...
''
861 __NOTOC__ Year 861 ( DCCCLXI) was a common year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Europe * March – Robert the Strong is appointed margrave of Neustria by King Ch ...
121 ER 762, which confirmed that a third party could not enforce a contract that benefited him.Flannigan (1987) p. 565 This decision was affirmed by the House of Lords in ''
Dunlop Pneumatic Tyre v Selfridge and Co Ltd , 915AC 847 is an English contract law case, with relevance for UK competition law, decided in the House of Lords. It established that an agreement for resale price maintenance was unenforceable as a matter of privity of contract. It should n ...
'' 915 AC 847 in 1915, where
Lord Haldane Richard Burdon Haldane, 1st Viscount Haldane, (; 30 July 1856 – 19 August 1928) was a British lawyer and philosopher and an influential Liberal and later Labour politician. He was Secretary of State for War between 1905 and 1912 during w ...
stated that only a person who was party to a contract could sue on it. This version of the doctrine is commonly known as the ''original'' or ''basic'' doctrine.


Criticism of the original doctrine

The second rule of privity, that a third party cannot claim benefits from a contract, was widely criticised by academics, members of the judiciary and legal professionals. One problem was that the rule made no exceptions for cases where it was obviously intended for the third party to claim a benefit, such as the young couple in ''Tweddle v Atkinson'', or the widow in ''
Beswick v Beswick was a landmark English contract law case on privity of contract and specific performance. The Lords, overruling the decision of Lord Denning in the Court of Appeal, ruled that a person who was not party to a contract had no independent standin ...
'', where an uncle gave his nephew a business, on the condition that the nephew would pay the uncle a certain amount per week, and in the event of the uncle's death, give a lesser amount to his widow.Mulcahy (2008) p. 95 A second argument used to undermine the doctrine of privity was to point out the large number of exceptions to the rule created by acts of Parliament, which seemed to indicate that Parliament itself had an issue with the doctrine.Flannigan (1987) p. 572 Critics also argued that with the large number of inconsistencies and exceptions with the doctrine of privity, it was "bad" law, as it provided no reliable rule; the way that the law works in theory is hugely different from how it is enforced in the courts.Jacobs (1986) p. 466 The doctrine is also not found in many other legal systems, such as that of the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
. The doctrine came under criticism from many academics and judges, including
Lord Scarman Leslie George Scarman, Baron Scarman, (29 July 1911 – 8 December 2004) was an English judge and barrister, who served as a Law Lord until his retirement in 1986. Early life and education Scarman was born in Streatham but grew up on the bo ...
,
Lord Denning Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when ...
, Lord Reid and
Arthur Linton Corbin Arthur Linton Corbin (October 17, 1874 – May 1, 1967) was an American lawyer and legal scholar who was a professor at Yale Law School. He helped develop the philosophy of law known as legal realism, and wrote one of the most celebrated legal tre ...
, and
Stephen Guest Stephen Guest, Barrister (Inner Temple) and Barrister and Solicitor (N.Z. High Court), is the Professor of Legal Philosophy at the University College London Faculty of Laws. Education Guest obtained his BA in Philosophy (1971) and his LLB at the ...
wrote that " is said that it serves only to defeat the legitimate expectations of the third party, that it undermines the social interest of the community in the security of bargains and it is commercially inconvenient".


Formation

The first legislative proposal to reform the doctrine of privity was made in 1937; the
Law Revision Committee A law commission, law reform commission, or law revision commission is an independent body set up by a government to conduct law reform; that is, to consider the state of laws in a jurisdiction and make recommendations or proposals for legal chang ...
, in their Sixth Interim Report, proposed an act of Parliament that would allow third parties to enforce terms of a contract that specified that they were allowed. The
Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
intervened and the report was not acted on; even as late as 1986 the assumption was that Parliament would not act, and any reform would come from judicial sources (in particular, the
House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...
). In 1991, the
Law Commission A law commission, law reform commission, or law revision commission is an independent body set up by a government to conduct law reform; that is, to consider the state of laws in a jurisdiction and make recommendations or proposals for legal chang ...
(the successor to the Law Revision Committee) published Consultation Paper No. 121 "Privity of Contract: Contracts for the Benefit of Third Parties", which proposed a similar change,Turner (2007) p.379 and, in July 1996, the final report (No. 242), along with a draft bill, were published. The proposed changes were supported by the legal profession and academics alike. The bill was introduced to the
House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...
on 3 December 1998, and, during its second reading, was jokingly offered to
Lord Denning Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when ...
as a birthday present due to his fight to overturn the doctrine of privity. It was moved to the
House of Commons The House of Commons is the name for the elected lower house of the bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of parliament. ...
on 14 June, and it received the
Royal Assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in other ...
on 11 November 1999.


Provisions


Section 1: Right of third party to enforce contractual term

Section 1 of the act overrides the old common law rule that a third party could not enforce the terms of a contract, as established in ''
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd , 915AC 847 is an English contract law case, with relevance for UK competition law, decided in the House of Lords. It established that an agreement for resale price maintenance was unenforceable as a matter of privity of contract. It should not ...
'', and also the rule that a third party could not act against the promisor, established in ''
Tweddle v Atkinson is an English contract law case concerning the principle of privity of contract and consideration. Its panel of appeal judges reinforced that the doctrine of privity meant that only those who are party to an agreement (outside of one of the wel ...
''. It allows a third party to enforce terms of a contract in one of two situations: firstly if the third party is specifically mentioned in the contract as someone authorised to do so, and secondly if the contract "purports to confer a benefit" on him. An exception to the second rule involves contracts that include language barring third parties from applying the rule. Another exception applies to contracts between
solicitor A solicitor is a legal practitioner who traditionally deals with most of the legal matters in some jurisdictions. A person must have legally-defined qualifications, which vary from one jurisdiction to another, to be described as a solicitor and ...
s and their clients to write wills, something governed by ''
White v Jones is a leading English tort law case concerning professional negligence and the conditions under which a person will be taken to have assumed responsibility for the welfare of another. Facts Two daughters of the deceased Mr Barratt (one of them ...
''
995 Year 995 ( CMXCV) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar. Events By place Japan * 17 May - Fujiwara no Michitaka (imperial regent) dies. * 3 June: Fujiwara no Michikane gain ...
2 AC 207. After the act was first published,
Guenter Treitel Sir Guenter Heinz Treitel (26 October 1928 – 14 June 2019) was a German-born English academic and Vinerian Professor of English Law. Treitel was born in Berlin into a Jewish family, the son of a prominent lawyer, Theodor Treitel, and his wife ...
argued that in a situation where the promisor felt that the second rule had been wrongly applied by a statement in the contract, the
onus Onus, from Latin, indicates accountability/responsibility Onus may also refer to: * Blame * Burden (disambiguation) * Legal burden of proof (''onus probandi'') As a surname * Bill Onus (1906-68), Australian Aboriginal political activist, boom ...
would be on him to prove it.Andrews (2001) p.355 In '' Nisshin Shipping Co Ltd v Cleaves & Co Ltd''
003 003, O03, 0O3, OO3 may refer to: *003, fictional British 00 Agent *003, former emergency telephone number for the Norwegian ambulance service (until 1986) *1990 OO3, the asteroid 6131 Towen * OO3 gauge model railway *''O03 (O2)'' and other related ...
EWHC 2602, the High Court supported Treitel's reasoning. The second situation, that a third party can enforce terms that "purport to confer a benefit on him", has been described by Meryll Dean as too broad, and one view put forward in the parliamentary debates was that it was "un-workable" in situations such as complex construction contracts involving dozens of sub-contractors with chains of contracts among them.Dean (2000) p.145 This argument, and a proposal to exempt the construction industry from the act, was rejected by both the Law Commission and Parliament. The phrase "purport to confer a benefit" was originally found in the 1937 Law Commission paper, and was used in the New Zealand Contracts (Privity) Act 1982 before it was adopted for the English act. The third party must be identified by name or as a member of a particular group, and does not need to exist when the contract was made. This can cause problems, however – if, for example, a party (party A) enters a contract to have another party (party B) construct a building, and A later sells the building to C who finds that it has structural problems, C has no cause of action against B because he was not named in the original contract. If a third party chooses to enforce the terms of a contract, he can do so against the promisor and has the right to any remedy that would be available if he was party to the contract, such as
specific performance Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. It is typically available in the sale of land law, ...
. An exception to this is the ability to terminate the contract and have it rendered void, since the Law Commission believed that "the third party should not be entitled to terminate the contract for breach as this may be contrary to the promisee's wishes or interests".McKendrick (2007) p.151 Although the topic is not discussed in the Law Commission's report or the bill itself, it is generally considered that the third party has no rights against the promisee, regardless of his rights against the promisor.
Andrew Burrows Andrew Stephen Burrows, Lord Burrows, (born 17 April 1957BURROWS, Prof. Andrew ...
, who prepared the Law Commission's report, said that the third party does not acquire rights against the promisee, something
Guenter Treitel Sir Guenter Heinz Treitel (26 October 1928 – 14 June 2019) was a German-born English academic and Vinerian Professor of English Law. Treitel was born in Berlin into a Jewish family, the son of a prominent lawyer, Theodor Treitel, and his wife ...
has also suggested. A different stance is taken in
Scots law Scots law () is the legal system of Scotland. It is a hybrid or mixed legal system containing civil law and common law elements, that traces its roots to a number of different historical sources. Together with English law and Northern Ireland l ...
, where a promisee has a duty to the third party to ensure performance of the contract.


Section 2: Variation and rescission of contract

Section 2 of the Act governs changes to and
rescission Rescission is the noun form of the verb "to rescind." It may refer to: * Rescission (contract law) * Rescission bill, a procedure to rescind previously appropriated funding in the United States * A synonym for repeal in parliamentary procedure * ...
of contracts. It prevents parties to a contract rescinding it or altering it to remove or modify the terms that affect the third party if the third party has told the promisor that he "assents" to the term, or that he has relied on the contract (and the promisor knows this, or could be expected to have known this). This is only the default position; the act allows parties to insert clauses into the contract which allow them to rescind or alter the contract without the consent of the third party if they so choose. The courts can ignore the consent of the third party and allow the promisor and promisee to change the contract if the third party is mentally incapable, unfindable or if it is impossible to tell if the third party has truly consented. At the same time the courts may add conditions to that decision, such as requiring the promisor or promisee to pay the third party compensation. Assenting is considered complete when the third party "communicates" his assent to the promisor, which can be done in a variety of ways, including by post. The contract may specify the communication method(s), and if it does, any other method is not valid.Andrews (2001) p.360 The third party does not have to have suffered a detriment from his "reliance"; it is enough that he has simply relied on the contract. It must be the third party who relied on the term, rather than another party closely related to the third party. If the third party relies on the terms of the contract, which are then breached, he can not only claim damages for any loss he suffered from relying on the contract but also for "standard" damages, such as loss of profit.McKendrick (2007) p.152


Section 3: Defences available to promisor

Section 3 covers the defences available to the promisor if the third party brings an action against him. In a dispute between the promisor and the third party over a term, the promisor can rely on any defence he would have if the dispute was with the promisee, as long as the defence is applicable to the term under dispute. The Law Commission directly rejected the suggestion that the promisor should have every defence in a dispute with a third party that he would have in a dispute with the promisee (regardless of whether or not it could be applied to the disputed term).Andrews (2001) p.361 Part III is directly modelled on the similar section of the New Zealand Contracts (Privity) Act 1982.Stevens (2004) p.303 The Act allows the promisor to list additional defences that can be used against the third party in the contract, which can be used to get around the Law Commission's decision not to give the promisor equal defences against both the third party and promisee by simply listing those additional defences the promisor would like access to. The Act takes a different attitude for the defences available to the third party in
counterclaim In a court of law, a party's claim is a counterclaim if one party asserts claims in response to the claims of another. In other words, if a plaintiff initiates a lawsuit and a defendant responds to the lawsuit with claims of their own against th ...
s, with the Law Commission saying that to apply the same rules would be "misleading and unnecessarily complex".McKendrick (2007) p.153 This is because the counterclaim may be more valuable than the original claim, which would impose an obligation on the third party to pay the promisor money, something not appropriate under the doctrine of privity which prohibits the placing of a burden or obligation on a third party. Again, the parties to the contract can insert a clause overriding this.


Section 4: Enforcement of contract by promisee

Section 4 preserves the right of the promisee to enforce any term of the contract. This allows the promisee to sue for any losses to themselves, but not for losses of the third party.


Section 5: Protection of promisor from double liability

Section 5 helps protect the promisor from double liability (having to pay two sets of damages for the same breach, one to the third party and one to the promisee) if the promisor breaches the contract.Andrews (2001) p.362 It does so in a very limited way, though – the promisor is only protected if he has first paid damages to the promisee, and the third party's claim comes after that. In addition the act only limits damages paid in this situation, it does not eliminate them.McKendrick (2007) p.154 If the promisee brings an action against the promisor and wins, any damages paid to the third party in a subsequent action must take the previous damages paid to the promisee into account. If the third party brings an action, and the promisee does so afterwards then the promisee cannot claim any damages. This is because the Law Commission felt that if the third party claimed compensation for the breach, the promisee would have no interest in the dispute any more. This fails to take into account situations where the promisee has suffered personal loss from the breach of contract. If the promisee brings an action first then the third party is prohibited from doing so, unless the promisee's action fails, in which case the third party is free to pursue his own claim.


Section 6: Exceptions

Section 6 creates exceptions to the scope of the act. While the act applies to standard contracts and contracts made by
deed In common law, a deed is any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions, sealed. It is commonly associated with transferring ...
s, it does not apply to contracts made as a part of negotiable instruments,
bills of exchange A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a ...
or promissory notes, or contracts governed by the
Companies Act 1985 The Companies Act 1985 (c. 6) is an Act of the Parliament of the United Kingdom of Great Britain and Northern Ireland, enacted in 1985, which enabled companies to be formed by registration, and set out the responsibilities of companies, their ...
, such as
articles of association In corporate governance, a company's articles of association (AoA, called articles of incorporation in some jurisdictions) is a document which, along with the memorandum of association (in cases where it exists) form the company's constituti ...
. The act also excludes contracts for the transport of goods across national lines, as these fall under international trade laws, and terms in an employment contract which allow a third party to sue an employee. These were excluded for one of two reasons – either the position of third parties in those types of contract are too well established to be changed easily, or there are reasons of public policy that make it a bad idea to allow the involvement of third parties, such as contracts of employment.


Section 7: Supplementary provisions relating to third party

Section 7(1) confirms that any exceptions to the rule of privity which existed prior to the 1999 act remain valid. This confirms the act does not supersede impliedly earlier protection of the law. Weakening the act's effect, section 7(3) prevents third parties from being "treated as a party to the contract" in relying on any other act. Equally section 7(2) gives to defendants (facing action from third parties) the ability to exclude liability for negligence, if reasonable other than for death or personal injury; it disapplies the protection of s.2(2) of the
Unfair Contract Terms Act 1977 The Unfair Contract Terms Act 1977c 50 is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most impo ...
which subject all such provisions with a counterparty consumer to the contract to the condition of reasonableness.


Section 8: Arbitration provisions

The Act allows the insertion of
arbitration clause An arbitration clause is a clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occur within a specific jurisdiction, it always bind ...
s, which require the parties to submit to specific arbitration procedures in the event of disputes. The Law Commission initially excluded arbitration clauses from the act, but later amended their draft bill so as to allow third parties to take advantage of arbitration proceedings. The provisions on arbitration clauses were not received well during the bill's passage through Parliament, and were described as "very messy", "a labyrinth" and "a mire". The Commission initially proposed that
jurisdiction clause Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. Jur ...
s be specifically excluded from the act.Andrews (2001) p.364 During the bill's passage through Parliament, however, this exclusion disappeared, and the act's explanatory notes assume that the act covers jurisdiction clauses.


Section 9: Northern Ireland

Section 9 takes into account the differences between English and Northern Irish law, and modifies how the act should be interpreted in Northern Ireland. Particularly it replaces the use of the
Companies Act 1985 The Companies Act 1985 (c. 6) is an Act of the Parliament of the United Kingdom of Great Britain and Northern Ireland, enacted in 1985, which enabled companies to be formed by registration, and set out the responsibilities of companies, their ...
in Part VI with the Northern Irish equivalent, the
Companies (Northern Ireland) Order 1986 A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared go ...
. Section 9 also repeals sections 5 and 6 of the
Law Reform (Husband and Wife) (Northern Ireland) Act 1964 Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...
.


Scope and implementation

The act applies in
England and Wales England and Wales () is one of the three legal jurisdictions of the United Kingdom. It covers the constituent countries England and Wales and was formed by the Laws in Wales Acts 1535 and 1542. The substantive law of the jurisdiction is Eng ...
and
Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; sco, label= Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is variously described as a country, province or region. Nort ...
, but not
Scotland Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to the ...
, which has its own rules on privity and the rights of third parties.Andrews (2001) p.363 The act came into law on 11 November 1999 when it received the
Royal Assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in other ...
, but the full provisions of the act did not come into force until May 2000.Dean (2000) p.149 The act made clear that contracts negotiated during a six-month "twilight period" after the act's passage fell under its provisions if they included language saying that they had been made under the terms of the act. The act had various consequences – as well as allowing third parties to enforce terms it also made a number of exceptions to the basic rule unnecessary, such as claiming on behalf of another party as seen in ''
Jackson v Horizon Holidays Ltd ''Jackson v Horizon Holidays Ltd''
975 Year 975 ( CMLXXV) was a common year starting on Friday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Arab–Byzantine War: Emperor John I raids Mesopotamia and invades Syria, using ...
1 WLR 1468 is an English contract law case, concerning the doctrine of Privity in English law, Privity. The case would now be partly resolved by the Contracts (Rights of Third Parties) Act 1999 section 1( ...
''
975 Year 975 ( CMLXXV) was a common year starting on Friday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Arab–Byzantine War: Emperor John I raids Mesopotamia and invades Syria, using ...
1 WLR 1468.Turner (2007) p.380 It did not repeal or abolish these exceptions, however, and this allows the courts to accept cases based on the old common law exceptions as well as the 1999 act.McKendrick (2007) p.155 The act specifically allows parties to exempt the provisions of the act from contracts, allowing them a way out if they so choose. The reaction from the judiciary, legal profession and academia was largely supportive of the act; the doctrine of privity had long been thought unfair. The act has been criticised somewhat by the construction industry for its refusal to make an exception for complex construction contracts, and for the vagueness of the term "purports to confer a benefit". It is generally accepted, however, that it would be unfair to make an exception for a particular industry, and case law has clarified the meaning of "purports to confer a benefit".


References


Notes


Bibliography

* * * * * * * * * * * * * * * * * * {{DEFAULTSORT:Contracts (Rights Of Third Parties) Act 1999 English contract law United Kingdom Acts of Parliament 1999