Rights of Third Parties Case Study Example | Topics and Well Written Essays - 3000 words

Rights of Third Parties - Case Study Example Contract is an agreement or set of promise between two or more persons which is binding and therefore legally enforceable. It covers transactions like buying and selling, employment of staff, partnership agreement and so on. It can also be described as: "an agreement which is legally binding on the parties to it and which broken may be enforced by action in court against the defaulting party. Existence of contract - Damages sought by claimants on the basis of fraud and breach of fiduciary duty in respect to diverted insurance premiums - Negotiations between the parties taking place after proceedings issued - Letter sent by claimant asking whether defendant accepted responsibility for the fraud - Letter signed and returned by defendant but with caveat - Whether binding agreement concluded between parties. Willis Management (Isle of Man) Ltd v Cable and Wireless plc [2005] 2 Ll L R 597 (CA/UK) A trust is an equitable obligation, binding a person (who is called a trustee) to deal with property over which he has control (which is called the trust property) either for the benefit of persons (who are called beneficiaries or cestuis que trust) of whom he may himself be one, and any one of whom may enforce the obligation, or for a charitable purpose, which may be enforced at the instance of the Attorney-General, or for some other purpose permitted by law though unenforceable. Pettit Equity and The Law of Trusts 8th ed. (1997) p 24. CONSTITUTION OF TRUSTS Constituting the Trust - act of vesting the trust property in the hands of the trustee. If inter vivos transferor will vest the property concurrent with declaration of trust, If testamentary property will vest upon testator's death in executors/administrators, - Rule - if trust not constituted, it is invalid- Problems: A declares trust in favour of B on Day 1, but doesn't transfer $$ to trustee until Day 5. - Rule - until the trustee receives the property, trust incompletely constituted invalid - Curative: On day 5, trust valid & operative b/c trustee has property - Settlor can be compelled to transfer property they promised to place in trust - where S received valuable consideration for promise to create trust RIGHT OF THE THIRD PARTY The Contracts (Rights of Third Parties) Act, which was given Royal Assent on 11th November 1999, radically changes a fundamental principle of English law, namely that only those who are parties to a contract can enforce rights under that contract - the 'privity of contract' rule. The Act applies to virtually all contracts. Therefore the construction industry must consider its impact on all its contracts - building contracts, subcontracts, consultants' appointments, collateral warranties, insurance policies, bonds, adjudication agreements etc. Right of third party to enforce contractual term: The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into. This section does not confer a right on a third party to enforce a term of a contract otherwise than subject to and in accordance with any other