What is the main purpose of the Contracts (Rights of Third Parties) Act 1999?

The main purpose of the Contracts (Rights of Third Parties) Act 1999 is to grant rights to third parties to enforce a contract that benefits them, even if they are not one of the original contracting parties. This legal framework allows individuals or entities who are not directly involved in a contract to bring a claim or take action if the contract confers a benefit upon them. This addresses scenarios where a contract is intended to benefit someone outside of the agreement, thereby enhancing the efficiency and enforceability of contractual agreements.

The Act thus reforms the common law position which traditionally held that only parties to a contract could enforce its terms. By recognizing the rights of third parties, the Act aims to promote fairness and practical justice in situations where the original contracting parties intended to benefit others. This clarifies and strengthens the legal standing of third parties in claims arising from contractual obligations, ultimately encouraging more inclusive contractual practices in commercial dealings.