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, cases such as White v Jones will not come to be regarded as actions in contract, since it must be the contract between the relevant contracting parties which expressly or impliedly confers a benefit on the third party and, in White v Jones, it was the will, rather than the contract which conferred the relevant benefit. The second question above asks if T can seek to rely on a defence contained in the contract between A and B in an action brought against him by A or B. Typically, such cases will involve the question of whether T is entitled to the protection of an exemption clause. Many commercial transactions involve many parties. Typical examples include international trade dealings under which there is a complex of relations between the buyer, seller, carrier and other parties involved in the process of shipment of a cargo. Similarly, many contracts entered into for the purposes of the construction of a building or a ship may involve a number of subcontractors as well as the party commissioning the work and the main contractor. These multipartite relationships are often difficult to explain in terms of traditional rules of the law of contract which appear to treat the two-party contract as the norm. Where exemption clauses are concerned, a simple application of the doctrine of privity of contract would suggest that a third party cannot claim the benefit of such a provision if it is part of a contract between two other parties. If a firm of stevedores, employed by a carrier to unload a cargo, negligently damages goods carried under the terms of a contract of carriage made between the consignor of goods and the carrier, the question may arise whether the stevedore, in an action brought by the purchaser of the cargo, can claim the benefit of an exclusion clause in the contract between the consignor and the carrier which purports to protect both the carrier and the stevedore. Commercial reality suggests that if the risk of loss or damage to a cargo has already passed to the buyer then he should be insured against that risk. Accordingly, since there is likely to be a valid insurance policy covering the risk of damage in the course of unloading, it makes commercial sense for the stevedores to be able to claim the protection of the exemption clause. However, a rigid application of the doctrine of privity of contract in this type of case would mean that the stevedores could be sued for the damage to the cargo despite the fact that the buyer was insured against that risk. The commercial reality approach suggests that there should be a doctrine of vicarious immunity under which the third party may rely upon an exemption clause in a contract to which he is not a party, provided it is the intention of all concerned that the benefit should be extended to such a person. However, the doctrine of vicarious immunity was later rejected by the House of Lords in Scruttons Ltd v Midland Silicones Ltd, where the
DOI link for , cases such as White v Jones will not come to be regarded as actions in contract, since it must be the contract between the relevant contracting parties which expressly or impliedly confers a benefit on the third party and, in White v Jones, it was the will, rather than the contract which conferred the relevant benefit. The second question above asks if T can seek to rely on a defence contained in the contract between A and B in an action brought against him by A or B. Typically, such cases will involve the question of whether T is entitled to the protection of an exemption clause. Many commercial transactions involve many parties. Typical examples include international trade dealings under which there is a complex of relations between the buyer, seller, carrier and other parties involved in the process of shipment of a cargo. Similarly, many contracts entered into for the purposes of the construction of a building or a ship may involve a number of subcontractors as well as the party commissioning the work and the main contractor. These multipartite relationships are often difficult to explain in terms of traditional rules of the law of contract which appear to treat the two-party contract as the norm. Where exemption clauses are concerned, a simple application of the doctrine of privity of contract would suggest that a third party cannot claim the benefit of such a provision if it is part of a contract between two other parties. If a firm of stevedores, employed by a carrier to unload a cargo, negligently damages goods carried under the terms of a contract of carriage made between the consignor of goods and the carrier, the question may arise whether the stevedore, in an action brought by the purchaser of the cargo, can claim the benefit of an exclusion clause in the contract between the consignor and the carrier which purports to protect both the carrier and the stevedore. Commercial reality suggests that if the risk of loss or damage to a cargo has already passed to the buyer then he should be insured against that risk. Accordingly, since there is likely to be a valid insurance policy covering the risk of damage in the course of unloading, it makes commercial sense for the stevedores to be able to claim the protection of the exemption clause. However, a rigid application of the doctrine of privity of contract in this type of case would mean that the stevedores could be sued for the damage to the cargo despite the fact that the buyer was insured against that risk. The commercial reality approach suggests that there should be a doctrine of vicarious immunity under which the third party may rely upon an exemption clause in a contract to which he is not a party, provided it is the intention of all concerned that the benefit should be extended to such a person. However, the doctrine of vicarious immunity was later rejected by the House of Lords in Scruttons Ltd v Midland Silicones Ltd, where the
, cases such as White v Jones will not come to be regarded as actions in contract, since it must be the contract between the relevant contracting parties which expressly or impliedly confers a benefit on the third party and, in White v Jones, it was the will, rather than the contract which conferred the relevant benefit. The second question above asks if T can seek to rely on a defence contained in the contract between A and B in an action brought against him by A or B. Typically, such cases will involve the question of whether T is entitled to the protection of an exemption clause. Many commercial transactions involve many parties. Typical examples include international trade dealings under which there is a complex of relations between the buyer, seller, carrier and other parties involved in the process of shipment of a cargo. Similarly, many contracts entered into for the purposes of the construction of a building or a ship may involve a number of subcontractors as well as the party commissioning the work and the main contractor. These multipartite relationships are often difficult to explain in terms of traditional rules of the law of contract which appear to treat the two-party contract as the norm. Where exemption clauses are concerned, a simple application of the doctrine of privity of contract would suggest that a third party cannot claim the benefit of such a provision if it is part of a contract between two other parties. If a firm of stevedores, employed by a carrier to unload a cargo, negligently damages goods carried under the terms of a contract of carriage made between the consignor of goods and the carrier, the question may arise whether the stevedore, in an action brought by the purchaser of the cargo, can claim the benefit of an exclusion clause in the contract between the consignor and the carrier which purports to protect both the carrier and the stevedore. Commercial reality suggests that if the risk of loss or damage to a cargo has already passed to the buyer then he should be insured against that risk. Accordingly, since there is likely to be a valid insurance policy covering the risk of damage in the course of unloading, it makes commercial sense for the stevedores to be able to claim the protection of the exemption clause. However, a rigid application of the doctrine of privity of contract in this type of case would mean that the stevedores could be sued for the damage to the cargo despite the fact that the buyer was insured against that risk. The commercial reality approach suggests that there should be a doctrine of vicarious immunity under which the third party may rely upon an exemption clause in a contract to which he is not a party, provided it is the intention of all concerned that the benefit should be extended to such a person. However, the doctrine of vicarious immunity was later rejected by the House of Lords in Scruttons Ltd v Midland Silicones Ltd, where the
ABSTRACT
Many commercial transactions involve many parties. Typical examples include international trade dealings under which there is a complex of relations between the buyer, seller, carrier and other parties involved in the process of shipment of a cargo. Similarly, many contracts entered into for the purposes of the construction of a building or a ship may involve a number of subcontractors as well as the party commissioning the work and the main contractor. These multipartite relationships are often difficult to explain in terms of traditional rules of the law of contract which appear to treat the twoparty contract as the norm. Where exemption clauses are concerned, a simple application of the doctrine of privity of contract would suggest that a third party cannot claim the benefit of such a provision if it is part of a contract between two other parties.