Contracts (Rights of Third Parties) Act 1999
It is now lost in the mists of time, but once upon a time there must have been a reason why the international capital markets were so collectively hostile to the Contracts (Rights of Third Parties) Act 1999, a small piece of well-intended legislation which allowed contractual counterparties to agree to grant a right to sue under a contract upon persons who otherwise would not have direct privity to do so.
Most likely the lawyer’s instinctive, huffy, reactionary petulance — which (while poor) was understandable in 1999 but, ladies and gentlemen, come on: haven't we grown out of that now?
Nonetheless, the great canon of capital markets boilerplate is shot through with hostility to this poor act. There's Para 27.10 of the 2010 GMSLA for example: the very last paragraph, when all else is said and done, they knife the poor CRTPA just when, perhaps, it thought it had got away with it.
It seems to your correspondent the CRTPA has its potential uses. To a careful user of the English language[1], really doesn't present much risk. And there are cases where it might be interesting:
- Secure Capital v Credit Suisse [2017] EWCA Civ 1486: A bearer security held as a global note by a common depositary on behalf of clearing systems which has a CRTPA provision excludes the right of the end noteholder (in the clearing systems) to sue the issuer. Held: end noteholder could not pursue the issuer directly.
See also
References
- ↑ And is there a more careful one than a member of the worshipful roll of solicitors?