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ARTICLE · 03 DECEMBER 1999

Contracts (Rights of Third Parties) Act 1999

Macfarlanes LLP
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New legislation is about to effect a radical change to the fundamental principle of English law that only those who are parties to a contract can enforce rights under that contract. The Contracts (Rights of Third Parties) Act will enable contracting parties to confer enforceable benefits, but not burdens, on others. The Act received Royal Assent on 11 November 1999. The effects of the Act can be excluded.

How does this affect me?

If the Act is not excluded, then when it comes into force a third party will have rights under a contract -

  • first, where the contract expressly states that the third party may enforce a contractual term
  • secondly, where a contract term "purports to confer a benefit" on the third party.

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