Contract law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB contract law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).
These were the best Contract Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest...
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PQ Approach in summary
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Two alternative ways T has a direct contractual claim:
s.1(1)(a) + s.1(3), or
s.1(1)(b) + s.1(2) + s.1(3)
Section 1(1) and 1(2) of the Contracts (Rights of Third Parties) Act 1999
Note that s. 1(1) may also be used to confer on T the benefit of an exclusion clause, per s. 1(6). |
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If (ii), apply the statute as understood in Nisshin Shipping v Cleaves:
Stage 1 of analysis: if A and B purports to confer on T a benefit, T has prima facie a direct right of action against A;
Stage 2 of analysis: to rebut this presumption,
A and B must show that on the proper construction of the contract they did not intend terms to be enforceable by T, or
if it was inconsistent with the contract, or
if there is a chain of contracts under which T has the right to sue someone else for the breach of the promisor’s obligation
Section 1(1)(b) does not apply to incidental beneficiaries – only direct beneficiaries: Dolphin Maritime v Sveriges Angfartygs Assurans Forening (2009). Facts: A was obligated to pay money to B through T, who was acting as B’s agent. T sought to enforce payment from A so that it could pass the money to B after deducting its commission. Verdict: Unsuccessful. T was solely acting as a conduit through which money would be transferred from A to B. There was no intent that T should be directly benefitted under the contract. Further, at stage 2 of the limb 2 test, it was not shown that A and B had truly intended that T should have a direct right of action against A.
Exam scenario In the White and Jones scenario, the benefit accrued to the daughter (the inheritance) is merely incidental to the benefit accrued to the father under the contract (the service by the solicitor). |
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Section 1(3) of the Contracts (Rights of Third Parties) Act 1999 The third party must be expressly identified in the contract (i) by name, (ii) as a member of a class or (iii) as answering a particular description but need not be in existence when the contract is entered into. |
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This is to be applied strictly, T has to fit at least one of the three categories: Avraamides v Colwill (2006)
There is no requirement in the 1999 Act that a third party who is entitled to the benefit of a contract is aware of the contract at the time it is made or at any particular time after that. This was confirmed in Chudley v Clydesdale Bank Plc (2019), where the third party, who succeeded under the 1999 Act, did not know about the contract when it was made.
Section 1(5) of the Contracts (Rights of Third Parties) Act 1999 For the purpose of exercising his right to enforce a term of the contract, there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and other relief shall apply accordingly). |
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Specific performance
The Act creates an exception to the general maxim of Equity that specific performance can only be awarded in favour of someone who has provided consideration. The Act states that T can obtain specific performance. However, B must have furnished consideration and debts and damages must be insufficient to protect T.
Damages
T can claim not just for “reliance-loss” but also “expectation interest” (financial or material gain that would have been achieved if the promisor had not breached his contract)
A and B jointly own the contract as they are the contracting parties. It is therefore in their interests to identify the point at which they last enjoyed freedom of contract to extinguish or enforce it. It is T’s interests to rapidly obtain an irrevocable right. The question here is when T would be held to obtain such a right.
Section 2(1) of the Contracts (Rights of Third Parties) Act 1999 Subject to the provisions of this section, where a third party has a right under section 1 to enforce a term of the contract, the parties to the contract may not, by agreement, rescind the contract, or vary it in such a way as to extinguish or alter his entitlement under that right, without his consent if –
(Note the “master clause” exception in s.2(3) below.) |
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Section 2(2) of the Contracts (Rights of Third Parties) Act 1999 The assent referred to in subsection (1)(a) – (a) may be by words or conduct, and (b) if sent to the promisor by post or other means, shall not be regarded as communicated to the promisor until received by him |
Section 2(3) provides a master clause Subsection (1) is subject to... |
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Contract law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB contract law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).
These were the best Contract Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest...
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