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Promisee Remedies In Contract For Benefit Of 3rd Party Notes

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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 [1980]: 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 WC rescinded deal 'improperly' so WID claimed losses and those of TT.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 [1968]:

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