Programme: Bachelor of Commerce in Human Resource

Management

Module: Commercial Law

Contracts for the Benefit of Third Parties

The general rule is that where person’s contract they can

bind only themselves, unless they act in a representative
capacity in which case they are not considered as parties to
the contract at all. Third parties can only acquire obligations
under a contract where the contract is entered into for the
benefit of the third person, or assignment, cession or
delegation takes place.
Allan makes an offer to Brenda to sell his car to her mother,
Khensy. Although Khensy was not a party to the original
contract, she may accept the offer by notifying Allan, after
which Brenda drops out of the picture. If Allan then refuses
to sell her the car, Khensy may sue him. Khensy is not,
however, obliged to accept the offer; if she says she does
not want the car then the contract falls away.