Third Party Rights

Question 1

Third party is entitled to sue (2)

Answer 1

Dutton v Poole (1677)

Flannigan (1987)

Question 2

Third party cannot sue (2) - no consideration/ not privy to contract

Answer 2

Tweddle v Atkinson (1861)

Confirmed in Dunlop Pneumatic Tyre v Selfridge (1915)

Question 3

Third party cannot sue even if contract was made with object of benefiting him - this caused hardship:
Right to be paid money

Relying on an exclusion clause in a contract between two other parties
Can get around doctrine of privity but it is hard

Answer 3

Beswick v Beswick - could not sue as wife

Scruttons Ltd v Midland Silicones

NZ Shipping Co Ltd v AM Satterthwaite & Co Ltd (The Eurymedon) [1975] AC 154

Question 4

Privity vs consideration

Answer 4

Kepong Prospecting Ltd v Schmidt [1968] AC 810
(X promises to pay Y and Z for consideration provided by Y. Z is privy to contract but cannot bring action unless he provides consideration to X)

Question 5

s.1 (1)(a) Contracts (Rights of Third Parties Act) ‘the contract expressly provides that he may’ solves the issue of third parties not having a right in which cases

Answer 5

Beswick

The Eurymedon

Question 6

When the contract ‘purports to confer a benefit’ s.1(1)(b) the third party can sue when one of the purposes of the contract must have been to benefit said third party

Answer 6

Dolphin Maritime & Aviation Services Ltd v Sveriges Angfartygs Assurans Forening

Question 7

If s.1(1)(b) is not disapplied the parties do have a right to sue (if available). Silence = neutral so does not disapply the right to enforce a term by third party

Answer 7

Nisshin Shipping Co Ltd v Cleaves & Co Ltd

Question 8

If the structure of the contract is such that a third party cannot consistently have a direct right to enforce a term then the court can infer that the right is excluded.

Answer 8

Junior Books v Veitchi & Co Ltd
(Employer and main contractor. Main contractor enters contract with sub contractor. Sub contractor cannot enforce term against employer and vice versa)

Question 9

Avoiding the common law rule

Action by the promisee (3)

Answer 9

Beswick v Beswick (action as administratrix)

Jackson v Horizon Holidays (foreseeable that the bad quality of hotel would affect whole family - can bring an action for them too)

Darlington Borough Council v Wiltshier (both parties aware that the building was for the benefit of the council so any defective building work would affect council –> right to sue builders)

Question 10

Avoiding the common law rule

Collateral contracts

Answer 10

The Eurymedon (anyone who did the offer was entitled to the benefit of the exclusion clause)