This is an extract of our Commentary On Contract (Rights Of Third Parties) Act 1999 document, which we sell as part of our Contract Law Notes collection written by the top tier of Oxford students.
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Commentary on Contract (Rights of Third Parties) Act 1999 Test of Enforceability
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
Name of third party
Identification of class of which X falls into (e.g. stevedores)
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
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
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)?
C = expressly identified
But any benefit is consequential to C from B's main benefit
So can't be sued on by C.
The Laemthong Glory (No.2) : 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?
? 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,
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
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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