This is an extract of our Promisee Remedies In Contract For Benefit Of 3rd Party document, which we sell as part of our Contract Law Notes collection written by the top tier of Oxford students.
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Promisee's remedies in a contract used for benefit of a third party If the promisee sues
Traditional view = promisee only able to recover its own loss (and in absence of this, only nominal damages to acknowledge the breach) o Woodar Investment Development v Wimpey Construction : WC and WID agreed a contract of sale for some land. Purchase price was PS850,000 with a condition to pay TT PS150,000 upon completion. WC rescinded deal 'improperly' so WID claimed losses and those of TT.
? Lord Wilberforce:
General rule = promisee can only recover nominal damages for breach of terms to third party If promisee has not suffered losses from that breach themselves. o Even where third party has suffered loss
Jackson v Horizon Holidays disapproved o Lord Denning:
? Although third parties can't sue on the contract
Promisee can o And Can recover losses of third parties as well as his own
? Is the only way to achieve a just result while the law is in the position that third parties cannot sue for their individual damages.
? Lord Keith:
Jackson has application in special circumstances where contract law needs flexibility o Such as where one party contracts for the benefit of a group (e.g. Dad arranges family holiday and all the family have a rubbish time)
? And thus can be applied where losses suffered by third parties can be rightly considered to be part of the loss suffered by the promisee (disappointment of Dad for stress/concern caused to rest of family as well as own disappointment/distress)
Should not be a general rule though. o Burrows: effect of this is that usually only nominal damages available
? You can only recover for that which you've lost
? Therefore, promisee won't have suffered where contract broken for benefit of third party
Thus promisee only gets nominal damages (about PS20) to recognise the breach.
Exceptions to nominal damages only o Specific Performance (although many restrictions on this)
? Beswick v Beswick :
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