Alder Ltd contracts with Birch Ltd for Birch to service Alder's boilers. A clause states that Birch's obligations 'are also for the benefit of, and may be enforced by, Cedar Ltd', a company that leases part of Alder's premises. Birch services the boilers negligently and Cedar Ltd suffers loss. Under the Contracts (Rights of Third Parties) Act 1999, can Cedar Ltd sue Birch Ltd on the contract?

Correct answer: B) Yes, because the contract expressly provides that Cedar Ltd may enforce the term

Explanation

The 1999 Act allows a third party to enforce a contractual term if the contract expressly says so, or if the term purports to confer a benefit on the third party and the parties did not intend otherwise. Cedar is expressly named, so it may enforce the term without providing consideration and without any assignment. This is a statutory exception to the doctrine of privity.