Contracts for the Benefit of Third Parties

Abstract

One of the distinctive features of the Scots law of contract is that a third party may have the right to sue on a contract. The same is possible in the law of South Africa but not in Roman law; nor until recently in English law. In South Africa the contract in favour of a third party or stipulatio alteri is widely used in practice. The same cannot be said about the Scottish equivalent, ius quaesitum tertio. But the theoretical significance of the legal principles that apply to these contracts far exceeds their practical importance. Third-party contractual rights have been a battleground for ideological disputes in both Scotland and South Africa, and both countries have a burgeoning literature on the subject. As a result it is difficult to contribute anything new to the learning in this field. There has, however, been no detailed or systematic comparison of contracts in favour of third parties in the two systems. This chapter attempts a thorough comparison.