P sold land to D and payment was partly to be made to P + a sum was to be paid to X. HL in fact found that there had been no breach of contract but speculated as to whether P could claim for the money pledged to X:
Lord Wilberforce/Salmon/Russell: Lord Denning was wrong in Jackson, though P might have been able to recover for the family if he had been proven to be their agent/trustee.
Lord Keith: Lord Denning’s reliance for his claim on a case to do with agency is obviously flawed. However there might be cases where the contracting party will have to benefit TP in another way if the contract is unfulfilled and in that case it may be proper to take into account the money not paid to TP which was pledged under contract. This does NOT apply merely where TP indirectly derives a benefit from the contract.
Lord Scarman: the courts should treat a clause to pay TP as prima facie evidence that P will benefit from D’s payment to TP (i.e, that non-payment will cause P loss) which is written into the contract.
