Contracts (Rights of Third Party) Act 1999

The Third Party Rights Act 1999 received Royal Assent on 11 November 1999. While the Bill has been around for some time - it received its first reading in the House of Commons on 14 June 1999 - the effect of the new legislation should on balance prove helpful to FM clients, contractors and their sub-contractors. The aim of the Act is to allow a third party, under certain circumstances, to have rights under a contract to which it is not itself a party - for example a sub-contractor employed by a total FM service provider. As the position stood, under the so-called privity rule third parties could be left without a remedy in the event of a breach of contract and the party who was in breach could find themselves free from liability.

The Act came into force on 11 November but the legislation will not generally apply to contracts until 6 months after this date - effectively from May 2000. A full analysis of the new regulations and their implications will be provided in the forthcoming January issue of Facilities Management Legal Update, available from 17 December.