1. Privity

2. Privity
The Contracts (Rights of Third Parties) Act 1999 establishes the circumstances in which the parties can enforce terms of contracts.

3. Privity
The requirement is that in order for the third party to gain rights of enforcement the contract in question must either expressly confer such a right on the third party or, alternatively, it must have been clearly made for their benefit.

4. Tweddle v Atkinson (1861)

6. Dunlop v Selfridge [1915]

8. Contracts (Rights of Third Parties) Act 1999
(1) a person who is not a party to a contract (3d party) may in his own right enforce a term of the contract if:
(a) the contract expressly provides that he may; or
(b) the term purports to confer a benefit
And that he has the same rights in respect of remedies and exclusion clauses as he would have if he were a party to the contract.

9. Contracts (Rights of Third Parties) Act 1999
Unless, properly construed, the parties did not intend the term to be enforceable by a 3d party
Nisshin Shipping Co v Cleaves & Co [2004]
Laemthong International Lines Co v Artis (The “Laemthong Glory”) (No. 2) [2005]
3d party beneficiary must be identified
Prudential Assurance v Ayres [2007]

10. S2 C(RTP)A 1999
Provides that the parties to a contract conferring rights on a 3d party may not rescind the contract so as to alter or extinguish the 3d party’s rights if:

11. The third party has communicated his assent to the term to the promisor; or
The promisor is aware that the 3d party has relied upon the term; or
The promisor can reasonably be expected to have foreseen that the 3d party would rely upon the term and the 3d party has relied upon it.

12. S3 C(RTP)A 1999
Confers upon the promisor the same defences and set-offs in respect of claims brought by the third party as would apply if the claim were brought by the promisee.

13. Ss 4 & 5 C(RTP)A 1999
4: states that the 3d party’s rights do not affect the rights of the promisee to enforce the contract.
5: protects a promisor from incurring double liability caused by similar claims being raised by the promisee and the third party.

16. No withdrawal of benefit if:
3d party has consented to it
The promisor is aware that the 3d party has relied on it; or
The promisor could reasonably be expected to foresee that the 3d party would rely on it and has done so.

17. Exceptions Collateral Contracts Law of Agency
Shanklin Pier v Detel Products [1951]
Law of Agency
New Zealand Shipping v AM Satterhwaite & Co, The “Eurymedon” [1974]

18. Exceptions Statutes: Married Women’s Property Act 1882
Road Traffic Act 1988
Bills of Exchange Act 1882
Law of Property Act 1925
Companies Act 1985 s14
Package Travel, Package Holidays and Package Tours Regulations 1992

19. Further Reading
Burrows, A. “The Contract (Rights of Third Parties) Act and its implications for commercial contracts” (2000) 20 LMCLQ 540
Stevens, R. “The Contract (Rights of Third Parties) Act” (2004) 120 LQR 292