Privity of Contract and Third Party Beneficiaries 2007

CIVIL LAW SECTION

PRIVITY OF CONTRACT AND THIRD PARTY BENEFICIARIES

Maria Lavelle, Alberta Law Reform Institute

Readers are cautioned that the ideas or conclusions set forth in this paper, including any proposed statutory language and any comments or recommendations, may not have not been adopted by the Uniform Law Conference of Canada. They may not necessarily reflect the views of the Conference and its Delegates. Please consult the Resolutions on this topic as adopted by the Conference at the Annual meeting.

Charlottetown, Prince Edward Island, Sept. 2007

TABLE OF CONTENTS

EXECUTIVE SUMMARY

REPORT

I. The Doctrine of Privity of Contract

(A) The Doctrine and Third Party Beneficiaries

(B) Examples of the Problems Created by the Doctrine of Privity of Contract

(C) Arguments For and Against the Doctrine of Privity of Contract

(i) Arguments Against Reform of the Privity Doctrine

(ii) Arguments in Favour of Reform of the Privity Doctrine

II. Judicial Devices, Statutory Provisions and the “Principled Exception”

(A) Judicial Devices

(B) Statutory Provisions

(C) The “Principled Exception”

(D) The Enforceability of An Agreement by a Third Party Beneficiary

III. Other Corollary Issues.

(A) Identification of Third Parties

(B) Variation and Rescission

(C) Defences

(D) Overlapping Claims

IV. The Need for Reform

(A) Preliminary Consultations

(B) Reforms in Other Jurisdictions

(i) Canada

(ii) Other Common Law Jurisdictions Outside of Canada

U.K

Ireland

New Zealand

Australia

Asia

United States

UNIDROIT

V. Options for Reform

(A) Judicial Development of Third Party Rights

(B) Legislative Exceptions in Particular Situations

(C) Abolish the Rule Preventing Non-Recovery by the Promisee of a Third Party’s Loss 23

(D) Adopt a General Provision

(E) A Detailed Legislative Scheme

VI. Should the ULCC Undertake this Project?

(A) Arguments For

(B) Arguments Against

(C) Recommendation

FOOTNOTES

Next Annual Meeting

2018 Conference (Centennial)

Delta Hotel

Québec City, QC

August 12 - 16, 2018