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Good morning sir, may I ask a question from bpp exercise book 5.10. I selected the third option which is wrong and I do understand why the first one and the second one is correct. But the answer just wrote that two parties may include a term that allows a third party to determine an essential term but does that also mean that third part may have no right to determine an essential term which I think is quite right? Many thanks for reading through my question and your help!
Hi Ichen,
Option 3 in this question is all about “Privity of Contract”. Privity of contract essentially means that only the 2 parties to the contract have the right to enforce a contract. Third parties do NOT generally have the right to enforce a contract nor do they have a right to choose an essential term.
For example if I enter into a contract to buy a car from you, we are the 2 parties to the contract. Only the 2 of us have the right to enforce and choose the terms and third parties like my wife for example would NOT have the right to choose terms on our contract as it is “private” between you and me (General rule).
But please remember that there are “exceptions” when a third party may be able to enforce a contract e.g. Contract Rights of Third Parties Act and under the Road Traffic Act.
I hope this clarifies 🙂
Kind regards,
Vijay
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