contracts (rights of third parties) act 1999

Question 1

s.1-3

Answer 1

1. A third party can enforce a contract if:
- The contract says they can, OR
- The contract benefits them, and it’s clear that the people who made the contract wanted them to have the right to enforce it.

2. They can’t enforce the contract if:
- The contract makes it clear that the people who made it didn’t intend for the third party to have any rights.

3. Who counts as a third party?
- They must be identified in the contract, either by:
- Name,
- A group they belong to, or
- A description (e.g., “the employee” or “the customer”).
- They don’t have to exist yet (e.g., an unborn child or future member of a group).

This law makes it possible for someone outside the contract to enforce it, but only if it’s clear they were meant to benefit

Question 2

act allows contractual provisions to be enforced by a non-contracting party in 2 circumstances

Answer 2

where the contract term purports to confer a benefit upon him
-> provided that it appears that the parties did not intend the term not to be enforceable by a third party

Question 3

Nisshin shipping co ltd v cleavers & co ltd

Answer 3

• held that if the contract is neutral on the question of whether the term was intended to be enforceable by the 3rd party then s1 does not apply

Question 4

act will not apply to

Answer 4

• bills of exchange, promissory notes + negotiable instruments
• statuatory contracts made under s14 of the companies act 1985
• any incorporation of document in a limited liability partnership
• contracts of employment
• contracts for the carriage of goods by sea

Question 5

variation of the contract

Answer 5

• the third party has communicated his assent to the term to the promisor
• the promisor is aware that the 3rd party has relied on the term
• the promisor can reasonably be expected to have foreseen that the 3rd party would rely on the term + the 3rd party has in fact relied on iy

Question 6

remedies for 3rd parties

Answer 6

s1-5-
- provides that the 3rd party has available to him any remedy that would have been available to him in action for a breach of contract if he had been party to the contract