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Additional info for Commercial Law Q&A 2003-2004 3 e (Cavendish Q & a)
There is no doubt that the freedom of contract philosophy underpinned much of the common law development, this philosophy being that the parties were free to decide for themselves what contract to make and what terms to incorporate into it. The law set out to provide for what would be the position if the parties had not themselves determined what it should be. Thus, throughout the 1893 Act, one finds provisions such as ‘unless otherwise agreed’ and also a general provision (now to be found in an amended form in s 55 of the 1979 Act) that where any right or liability would arise by implication of law, it can be negatived by express agreement between the parties.
Thus, the implied terms which create strict liability generally apply only as between seller and buyer. This has two effects. First, a buyer (let us call him Harry) who has bought, say, a defective car which is not of satisfactory quality can in general sue only his seller for breach of the implied term as to satisfactory quality. Although his seller can then sue the person from whom he bought the car, Harry cannot take the shortcut of himself suing someone further up the distribution chain. This could leave Harry without a remedy in the situation where his seller has become bankrupt.
Thus, a third party can now enforce a contract where the third party is able to rely on the Contracts (Rights of Third Parties) Act 1999. This enables a third party to enforce a term of a contract if either: (a) the contract expressly provides that he may; or (b) the term purports to confer a benefit upon the third party. To be able to enjoy this right, the third party must be expressly identified in the contract by name or as a member of a class or as answering a particular description. This statute is too recent to have generated any case law, but its effect is clearly very limited and does not extend to anyone who is neither expressly given a right in the contract nor purported to be given a benefit by the contract.