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Promisee Remedies In Contract For Benefit Of 3rd Party Notes

Updated Promisee Remedies In Contract For Benefit Of 3rd Party Notes

Contract Law Notes

Contract Law

Approximately 1511 pages

From the AuthorContract 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 ...

The following is a more accessible plain text extract of the PDF sample above, taken from our Contract Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

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)

    • Woodar Investment Development v Wimpey Construction [1980]: WC and WID agreed a contract of sale for some land. Purchase price was 850,000 with a condition to pay TT 150,000 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 WC rescinded deal ‘improperly’ so WID claimed losses and those of TT.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.

          • Even where third party has suffered loss

        • Jackson v Horizon Holidays disapproved

          • Lord Denning:

            • Although third parties can’t sue on the contract

              • Promisee can

                • 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

          • 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.

    • 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 20) to recognise the breach.

  • Exceptions to nominal damages only

    • Specific Performance (although many restrictions on this)

      • Beswick v Beswick [1968]:

        • Lord Reid: Would be grossly unfair if nominal damages was the only remedy, however, Old B’s estate can order specific performance of the obligation

        • Lord Pearce:

          • In absence of specific performance, would be a substantial defect in the law if promisee only allowed to recover nominal damages when a third party has suffered a great loss

            • Should be substantial damages recoverable from D by B for C’s loss, which should then be payable to C.

  • Exception to traditional rule – promisee can recover third party’s loss

    • The Albezero

      • Lord Diplock:

        • In a commercial contract concerning goods

          • where C and D know that proprietary interests of goods may be transferred from C to X after entrance into contract

            • and before the breach which causes loss or damage to the goods

        • C, if such be the intention of them both,

          • is to be treated in law as having entered into the contract for the benefit of X

            • and is entitled to recover by way of damages for breach of contract the actual loss sustained by X for whom the contract was entered into.

      • Linden Gardens BC v Lenista Sludge Disposals [1994]:

        • Lord Wilberforce...

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