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By Andrew Burrows

Restatement of the English legislation of agreement

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3) For the purposes of this Part— ‘the promisor’ means the party to the contract against whom the contract is enforceable; and ‘the promisee’ means the party to the contract by whom the contract is enforceable. 46 Enforcement by the promisee (1) A promisee’s damages for breach of a contract made for the benefit of a third party are normally concerned to compensate the loss of the promisee, not the loss of the third party, so that those damages will often be nominal. (2) A promisee may be granted specific performance requiring the promisor to perform for the benefit of the third party where a court is satisfied that the damages for the promisee, in particular nominal damages, would be inadequate to produce a just result.

Subject to an express term to the contrary, where a third party has a right under subsection (1), the parties may not extinguish or alter that right without the consent of the third party if— (a) the third party has communicated its assent to the term to the promisor, or (b) the third party has relied on that term and the promisor is aware of that reliance or could reasonably have foreseen it. Subject to an express term to the contrary, where a third party brings proceedings to enforce a right under subsection (1), the promisor may rely on any defence that would have been available to the promisor had the proceedings been brought by the promisee.

A contract that would otherwise be unenforceable as mentioned in subsection (1) or (2) may be severed so that the objectionable part of the contract is disregarded and the rest of the contract is enforceable; but severance is possible only if— (a) the objectionable part of the contract does not form the main consideration under the contract; (b) the objectionable part of the contract can be separated from the rest of the contract without rewriting; and (c) severance would not entirely alter the nature of the agreement.

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