Contracts (Privity) Act

Question 1

Section 4

Answer 1

1. Need promise contained in deed or contract
   o Definition of contract: includes contract made by deed or in writing. May be done in writing, orally, or both
2. Must confer, or purport to confer a benefit
   o Benefit defined widely: ANY advantage that arises from contract or deed. Range from money to supply of goods, a limitation of liability that would otherwise be owed, an exclusion of liability, etc.
3. On a person must be designated by name, description, or reference to a class
   o Designated: Expressly identified.
   o Description: could be children of X, employees of company Y, a certain person, etc.
   o Reference to a class: would include people belonging to a specific description
4. Must not be a party to the deed or contract
   o You could enforce it in the ordinary way
   o Whether or not the person is in existence at the time when the deed or contract is made
   o e.g. employees of a company that is yet to be formed
5. The promisor shall be under obligation, enforceable at the suit of that person, to perform that promise

Question 2

Section 7

Answer 2

• 7(1) (requires s4)
• 7(2) uses the term “injuriously affected”. Why not MAP?
o Can MAP but not injuriously affected?
o DMac thinks this is Shotty draftmanship
o Maybe Parl thought benefit could take on some new liabilities but can’t tell whether it’s going to be to their detriment - might be a benefit to the beneficiary so the section only provides compensation for those who would be worse off by its reliance or someone else’s reliance.
o When IA is established, the court must make it an order
• Suppose we go back to DMac’s variation on the example. C pays 50 on lotto and loses. If the court thinks it was just for A and B to vary, must make it an order that C receive the 50 that she lost.