The Enactment of the Contracts (Rights of Third Parties) Act

question 2

Multiple Choice

The enactment of the Contracts (Rights of Third Parties) Act 1999 (C(RTP) A) was intended to provide a third party with a direct right to enforce contractual terms made for his benefit although he is not the promisee and he has not given consideration for the promise. Which of the following statements is true?

• A) C(RTP)A has abrogated the privity rule and replaced all avoidance devices previously applied by the courts to circumvent it.
• B) C(RTP)A provides the promisee with a direct right to claim damages on behalf of the third party.
• C) C(RTP)A is only one more exception to the privity rule. All previous avoidance devices are still valid.
• D) C(RTP)A provides contracting parties with the possibility of imposing a burden on a third party.

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Definitions:

Price-and-quantity-fixing

Practices by which firms set the price and output levels to control market conditions, often regarded as anti-competitive.

Collusion

A secret or illegal cooperation or conspiracy, especially between firms, to deceive or gain an unfair advantage.

Demand Curve

The Demand Curve depicts the relationship between the price of a product and the amount of it that consumers are willing to purchase at various prices, usually sloping downward from left to right.

Dominant Firm

A company with a significant market share or influence, often capable of setting prices within its industry.