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When drafting or negotiating third party rights provisions in a construction contract (see Practice Note: The Contracts (Rights of Third Parties) Act 1999 in construction contracts), the following should be taken into account:

1. •

   Is the Contracts (Rights of Third Parties) Act 1999 generally excluded?

   Does the contract expressly exclude the conferring of rights/benefits on third parties by virtue of the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999)? Contracts typically contain a general exclusion clause in relation to C(RTP)A 1999 but, in construction agreements, this is commonly made subject to any relevant clause of the agreement conferring third party rights on specific parties—see for example Precedent: Third Party Rights Act clause. If there is a general exclusion, make sure that the clause conferring rights on third parties is carved out.

2. •

   Third party rights or collateral warranty?

   If the contract provides that third party beneficiaries will have certain benefits, or rights to enforce the contract, does it specify whether such rights/benefits will be granted to them under C(RTP)A 1999 or by the provision of a collateral