Contracts (Rights of Third Parties) Act 1999: Enforcing Contractual Terms by Third Parties, Study Guides, Projects, Research of Law

Download Contracts (Rights of Third Parties) Act 1999: Enforcing Contractual Terms by Third Parties and more Study Guides, Projects, Research Law in PDF only on Docsity! Changes to legislation: There are currently no known outstanding effects for the Contracts (Rights of Third Parties) Act 1999. (See end of Document for details) Contracts (Rights of Third Parties) Act 1999 1999 CHAPTER 31 An Act to make provision for the enforcement of contractual terms by third parties. [11th November 1999] Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:— Extent Information E1 Act extends to Northern Ireland but the operation of s. 9 is limited by application as mentioned in s. 9(1) Commencement Information I1 Act in force at Royal Assent (11.11.1999): for application see s. 10(2)(3) 1 Right of third party to enforce contractual term. (1) Subject to the provisions of this Act, a person who is not a party to a contract (a “third party”) may in his own right enforce a term of the contract if— (a) the contract expressly provides that he may, or (b) subject 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. 2 Contracts (Rights of Third Parties) Act 1999 (c. 31) Document Generated: 2021-08-03 Changes to legislation: There are currently no known outstanding effects for the Contracts (Rights of Third Parties) Act 1999. (See end of Document for details) (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. 2 Variation and rescission of contract. (1) Subject to the provisions of this section, where a third party has a right under section 1 to enforce a term of the contract, the parties to the contract may not, by agreement, rescind the contract, or vary it in such a way as to extinguish or alter his entitlement under that right, without his consent if— (a) the third party has communicated his assent to the term to the promisor, (b) the promisor is aware that the third party has relied on the term, or (c) the 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. (2) The assent referred to in subsection (1)(a)— (a) may be by words or conduct, and (b) if sent to the promisor by post or other means, shall not be regarded as communicated to the promisor until received by him. (3) Subsection (1) is subject to any express term of the contract under which— (a) the parties to the contract may by agreement rescind or vary the contract without the consent of the third party, or (b) the consent of the third party is required in circumstances specified in the contract instead of those set out in subsection (1)(a) to (c). (4) Where the consent of a third party is required under subsection (1) or (3), the court or arbitral tribunal may, on the application of the parties to the contract, dispense with his consent if satisfied— (a) that his consent cannot be obtained because his whereabouts cannot reasonably be ascertained, or (b) that 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 Contracts (Rights of Third Parties) Act 1999 (c. 31) Document Generated: 2021-08-03 5 Changes to legislation: There are currently no known outstanding effects for the Contracts (Rights of Third Parties) Act 1999. (See end of Document for details) except that a third party may in reliance on that section avail himself of an exclusion or limitation of liability in such a contract. (6) In subsection (5) “contract for the carriage of goods by sea” means a contract of carriage— (a) contained in or evidenced by a bill of lading, sea waybill or a corresponding electronic transaction, or (b) under or for the purposes of which there is given an undertaking which is contained in a ship’s delivery order or a corresponding electronic transaction. (7) For the purposes of subsection (6)— (a) “bill of lading”, “sea waybill” and “ship’s delivery order” have the same meaning as in the M2Carriage of Goods by Sea Act 1992, and (b) a corresponding electronic transaction is a transaction within section 1(5) of that Act which corresponds to the issue, indorsement, delivery or transfer of a bill of lading, sea waybill or ship’s delivery order. (8) In subsection (5) “the appropriate international transport convention” means— (a) in relation to a contract for the carriage of goods by rail, the Convention which has the force of law in the United Kingdom under section 1 of the M3International Transport Conventions Act 1983, (b) in relation to a contract for the carriage of goods by road, the Convention which has the force of law in the United Kingdom under section 1 of the M4Carriage of Goods by Road Act 1965, and (c) in relation to a contract for the carriage of cargo by air— (i) the Convention which has the force of law in the United Kingdom under section 1 of the M5Carriage by Air Act 1961, or (ii) the Convention which has the force of law under section 1 of the M6Carriage by Air (Supplementary Provisions) Act 1962, or (iii) either of the amended Conventions set out in Part B of Schedule 2 or 3 to the M7Carriage by Air Acts (Application of Provisions) Order 1967. Extent Information E2 In its application to Northern Ireland, this section has effect subject to the modifications set out in s. 9(2)(3) Textual Amendments F2 Words in s. 6(2) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), arts. 1(2), 2(1), Sch. 1 para. 179(2) (a) (with art. 10) F3 S. 6(2A) inserted (N.I.) (13.9.2004) by Limited Liability Partnerships Regulations (Northern Ireland) 2004 (S.R. 2004/307), regs. 1, 9, Sch. 4 para. 16 F4 Words in s. 6(2A) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), arts. 1(2), 2(1), Sch. 1 para. 179(2) (b) (with art. 10) F5 S. 6(2A) inserted (E.W.) (6.4.2001) by S.I. 2001/1090, reg. 9, Sch. 5 para. 20 Marginal Citations M1 1998 c. 39. M2 1992 c. 50. 6 Contracts (Rights of Third Parties) Act 1999 (c. 31) Document Generated: 2021-08-03 Changes to legislation: There are currently no known outstanding effects for the Contracts (Rights of Third Parties) Act 1999. (See end of Document for details) M3 1983 c. 14. M4 1965 c. 37. M5 1961 c. 27. M6 1962 c. 43. M7 S.I. 1967/480. 7 Supplementary provisions relating to third party. (1) Section 1 does not affect any right or remedy of a third party that exists or is available apart from this Act. (2) Section 2(2) of the M8Unfair Contract Terms Act 1977 (restriction on exclusion etc. of liability for negligence) shall not apply where the negligence consists of the breach of an obligation arising from a term of a contract and the person seeking to enforce it is a third party acting in reliance on section 1. (3) In sections 5 and 8 of the M9Limitation Act 1980 the references to an action founded on a simple contract and an action upon a specialty shall respectively include references to an action brought in reliance on section 1 relating to a simple contract and an action brought in reliance on that section relating to a specialty. (4) A third party shall not, by virtue of section 1(5) or 3(4) or (6), be treated as a party to the contract for the purposes of any other Act (or any instrument made under any other Act). Extent Information E3 In its application to Northern Ireland, this section has effect subject to the modifications set out in s. 9(2)(3) Marginal Citations M8 1977 c. 50. M9 1980 c. 58. 8 Arbitration provisions. (1) Where— (a) a right under section 1 to enforce a term (“the substantive term”) is subject to a term providing for the submission of disputes to arbitration (“the arbitration agreement”), and (b) the arbitration agreement is an agreement in writing for the purposes of Part I of the M10Arbitration Act 1996, the third party shall be treated for the purposes of that Act as a party to the arbitration agreement as regards disputes between himself and the promisor relating to the enforcement of the substantive term by the third party. (2) Where— (a) a third party has a right under section 1 to enforce a term providing for one or more descriptions of dispute between the third party and the promisor to be submitted to arbitration (“the arbitration agreement”), Contracts (Rights of Third Parties) Act 1999 (c. 31) Document Generated: 2021-08-03 7 Changes to legislation: There are currently no known outstanding effects for the Contracts (Rights of Third Parties) Act 1999. (See end of Document for details) (b) the arbitration agreement is an agreement in writing for the purposes of Part I of the Arbitration Act 1996, and (c) the third party does not fall to be treated under subsection (1) as a party to the arbitration agreement, the third party shall, if he exercises the right, be treated for the purposes of that Act as a party to the arbitration agreement in relation to the matter with respect to which the right is exercised, and be treated as having been so immediately before the exercise of the right. Marginal Citations M10 1996 c.23. 9 Northern Ireland. (1) In its application to Northern Ireland, this Act has effect with the modifications specified in subsections (2) and (3). (2) F6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) In section 7, for subsection (3) there is substituted— “(3) In Articles 4(a) and 15 of the M11Limitation (Northern Ireland) Order 1989, the references to an action founded on a simple contract and an action upon an instrument under seal shall respectively include references to an action brought in reliance on section 1 relating to a simple contract and an action brought in reliance on that section relating to a contract under seal.”. (4) In the M12Law Reform (Husband and Wife) (Northern Ireland) Act 1964, the following provisions are hereby repealed— (a) section 5, and (b) in section 6, in subsection (1)(a), the words “in the case of section 4” and “and in the case of section 5 the contracting party” and, in subsection (3), the words “or section 5”. Extent Information E4 S. 9 extends to Northern Ireland but the operation of s.9 is limited by application as mentioned in s. 9(1) Textual Amendments F6 S. 6(2) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), arts. 1(2), 2(1), Sch. 1 para. 179(3) (with art. 10) Marginal Citations M11 S.I. 1989/1339 (N.I. 11). M12 1964 c. 23 (N.I.).