Contracts in Favour of Third Persons in Europe: First Steps Toward Tomorrowâ??s Harmonization

Abstract

Abstract: This article discusses how the contract in favour of a third person made its way onto the European scene. It suggests why the practical advantages and efficiencies of the contract finally outweighed the traditional law’s attachment to the principles of privity and relativity of contract. The discussion then describes the various analogies, false leads, and inventive approaches that jurists pursued in their search for a coherent account of the institution. The article also attempts to compare, contrast, and evaluate current European approaches at codification and harmonization, including the recent contributions made by the Lando Principles of European Contract Law and the Gandolfi European Code of Contract. For comparative purposes the evaluation centres around four essential issues in the beneficiary puzzle and assesses to what extent a set of common principles or rules has developed in Europe. It is discovered that the principal areas in which the legal systems do not entirely agree are the methods to determine the favoured beneficiary, the point when the beneficiary’s rights arise, the power of revocation, and the perfection of revocations. The conclusion is that while this institution is recognized as valid in all European legal systems, Europe has not as yet developed a completely coherent account of the subsidiary rules. A foundation for an eventual harmonization certainly exists, but further study and reflection will be needed to deal with these questions.