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

The purpose of the Contracts (Rights of Third Parties) Act 1999 is designed to allow outsiders, who are not parties to a contract, to have rights under that contract in certain circumstances. This Act provides a legal framework whereby third parties can benefit from the terms of a contract made between two other parties, thus ensuring that they can enforce certain rights if the contract expressly provides for it.

This advancement in contract law enables third parties to make claims directly against the contracting parties when the contract stipulates that their interests should be protected. For example, in an insurance context, if a policy is intended to benefit an individual who is not a direct party to the contract, that individual may claim benefits under the policy, reinforcing the Act's critical role in modern contractual relations.

This context is significant as it embodies the broader aim of the Act: enhancing the rights of third parties rather than restricting them or solely imposing obligations on insurers or defining consumer insurance terms.