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Hint
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Answer
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1. Introduction
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x
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Generally, a third party cannot enforce nor be liable on a contract to which they are not a party.
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Dunlop v Selfridge
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x
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STATUTORY EXCEPTIONS
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x
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Intro
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x
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The Contracts (Rights of ___ _____) Act 1999 outlines two situations in which a third party to a contract can enforce it (but it does not impose any liability on the third party).
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third parties
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For any of the two exceptions to apply, the TP MUST be expressly identified in the contract.
TP must be identified in the contract in any of the following ways:
• By ____: The contract explicitly names the third party.
• By class or description: The third party is identified as belonging to a specific group or class, such as "employees of Company X" or "the buyer's family."
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name
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The third party does not need to ____ at the time of the contract formation, as long as they can be identified when the contract is to be enforced.
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exist
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If a TP can enforce a contract, they are entitled to the ____ remedies as the original contracting parties.
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same
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x
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1. Exception 1: The Contract Expressly Provides for Third-Party Rights
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x
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TPs can enforce a contract if the contract itself ______ states that a third party may do so. The contract must explicitly specify that the third party has the right to enforce the term.
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expressly/explicitly
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x
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2. Exception 2: The Contract Purports to Confer a Benefit on the Third Party
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x
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If it appears that the contract was intended to benefit the TP, there will be a rebuttable presumption that the contracting parties intended the TP to have the right to enforce.
This presumption can only be rebutted by an ____ term in the contract.
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express
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x
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JUDICIAL EXCEPTIONS
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x
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1. Agency
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x
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When one party (the agent) enters into a contract on behalf of another party (the principal), allowing the principal to sue or be sued under the contract even though they were not directly involved in its formation.
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Teheran v Belton
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However, the principal cannot claim the benefits of a contract if the agent explicitly represents themselves as the principal. In other words, if an agent clearly states they are acting on their own behalf (rather than on behalf of a principal), the actual principal cannot later step in and enforce the contract.
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Humble v Hunter
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x
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2. Tortious Liability
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x
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A third party who suffers ______ as a result of negligent actions taken during the performance of a contract may bring a claim in tort, even though they are not a party to the contract. This allows them to claim damages under tort law.
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harm
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x
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3. Recovery of Third-Party Loss by Contracting Party
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x
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A contracting party can recover damages for losses suffered by a third party due to a breach of contract, even though the third party was not a party to the contract.
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Jackson v Horizon Holidays
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x
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4. Collateral contracts
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x
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A collateral contract is an independent agreement that promises something in addition to the main contract, often providing assurances or guarantees. If a third party is involved in or benefits from this collateral contract, they may be able to enforce it.
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Shanklin v Dettol
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