Third party rights

by Practical Law Commercial

Maintained | England, Wales

A boilerplate third party rights clause to address the rights of non-parties under the Contracts (Rights of Third Parties) Act 1999 (CRTPA 1999), or at all. The CRTPA 1999, which allows a third party to enforce a contract term in their favour, creates potential pitfalls for contracting parties, including the risk of unintentionally granting enforceable rights to non-parties. It may also limit the original parties' freedom to vary or rescind their agreement without obtaining third party consent. This boilerplate clause provides the contractual means for the parties to manage these risks and can be used to exclude all third party rights under the CRTPA 1999, or to permit specific, express rights while negating any unintended ones. The drafting notes explore the key legal issues, how to create or modify third party rights and how to preserve the parties' ability to amend their contract.

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