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Commentary On Contract (Rights Of Third Parties) Act 1999 Notes

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A more recent version of these Commentary On Contract (Rights Of Third Parties) Act 1999 notes – written by Oxford students – is available here.

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Commentary on Contract (Rights of Third Parties) Act 1999 Test of Enforceability

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First = Simple Test s.1(1)(a) and s.1(3) o Two conditions
? S.1(1)(a): Third party is expressly mentioned as having a specific right
? S.1(3): Identification may comprise of

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Name of third party

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Identification of class of which X falls into (e.g. stevedores)

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Or a particular description of whom X could be (e.g. person living at particular address) o Third party need not be in existence when agreement is made

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Second Test = Implied Test s.1(1)(b) s.1(2) and s.1(3) o Three conditions
? S.1(1)(b): Term must purport to confer a benefit on third party

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Burrows: not meant to include consequential benefits o E.g. Trietel: A employed under contract with B to cut B's hedge adjoining C's land
? Does this fall within s.1(1)(b)?

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C = expressly identified

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But any benefit is consequential to C from B's main benefit

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So can't be sued on by C.

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The Laemthong Glory (No.2) [2005]: Sellers sell goods, buyer agrees to indemnify sellers, servants and agents against loss caused by the seizing of the ship, Ship was then seized. Ship owners suffered loss - can they use indemnity clause?
o Held
? For the purpose of delivering the cargo it's right to say that the owners acted as the charterers' agents,
? Others might also be involved, perhaps stevedores or port agents something of that kind,

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should they be the agents of the charterers in fact, o but it is clear that the primary party to whom this clause was intended to refer as "your agents" must be the owners
? S.1(3): Third party must be expressly identified by name, description or class (but need not be in existence)
? S.1(2): Avoid presumption of parties intending to confer rights on X being overturned by evidence to the contrary

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Burrows: attempting to balance need for certainty with need for flexibility, borrowed from NZ Law. o Comes from idea "when is it likely that parties have conferred a benefit?"
? Answer = expressly identified

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