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}}It is now lost in the mists of history, but once upon a time there must have been a reason why lawyers of the international capital markets were so collectively hostile to the [[Contracts (Rights of Third Parties) Act 1999]], a small piece of well-intended legislation which allowed contractual parties to agree that persons benefiting from their contract, but who were not parties to it (and thus did not have the necessary “[[privity of contract]]” required by the [[common law]] to take action under it), might, upon a breach, be allowed to sue the breaching party directly to recover their loss. | }}It is now lost in the mists of history, but once upon a time there must have been a reason why lawyers of the international capital markets were so collectively hostile to the [[Contracts (Rights of Third Parties) Act 1999]], a small piece of well-intended legislation which allowed contractual parties to agree that persons benefiting from their contract, but who were not parties to it (and thus did not have the necessary “[[privity of contract]]” required by the [[common law]] to take action under it), might, upon a breach, be allowed to sue the breaching party directly to recover their loss. | ||
Look, who could possibly object to that worthy object? | |||
Well, the community of English lawyers did, most likely, through its instinctive, huffy, reactionary petulance — perhaps understandable in 1999 but, ladies and gentlemen, come on: haven't we grown out of that now? | Well, the community of English lawyers did, most likely, through its instinctive, huffy, reactionary petulance — perhaps understandable in 1999 but, ladies and gentlemen, come on: haven't we grown out of that now? | ||
So the great canon of capital markets [[boilerplate]] is shot through with hostility to this poor act. There’s Para {{gmslaprov|27.10}} of the {{gmsla}} for example: the very last paragraph, when all else is said and done, they knife the poor [[CRTPA]] just when, perhaps, it thought it had finally got away with it. | |||
It seems to [[Jolly Contrarian|your correspondent]] the [[CRTPA]] has its uses. To a careful user of the English language — and is there a carefuller one than a member of the worshipful company of solicitors? — it really ought not present much risk. | It seems to [[Jolly Contrarian|your correspondent]] the [[CRTPA]] has its uses. To a careful user of the English language — and is there a carefuller one than a member of the worshipful company of solicitors? — it really ought not present much risk. If you don’t wish to confer a benefit on a third party then ... ''don’t''. But if you have reason to, why not? To be sure there are cases where it might be interesting: where the contracting counterparty who might enforce on a beneficiary’s behalf is dead, or insolvent, suddenly indisposed to the well-being of his erstwhile friend, or just disinclined to take action for fear of upsetting a mendacious client. | ||
So, set the beneficiary free to fight his own battles, independent of the whims of his [[Privity of contract|privitous]] friend! | |||
And these authorities: | |||
*{{casenote|Secure Capital|Credit Suisse}} [2017] EWCA Civ 1486: A [[bearer security]] held as a global note by a [[common depositary]] on behalf of clearing systems which has a CRTPA provision excludes the right of the end noteholder (in the clearing systems) to sue the issuer. Held: end noteholder could not pursue the issuer directly. | *{{casenote|Secure Capital|Credit Suisse}} [2017] EWCA Civ 1486: A [[bearer security]] held as a global note by a [[common depositary]] on behalf of clearing systems which has a CRTPA provision excludes the right of the end noteholder (in the clearing systems) to sue the issuer. Held: end noteholder could not pursue the issuer directly. | ||
*{{casenote|Chudley|Clydesdale Bank plc}} — a classic case where the [[CRTPA]] delivers a sound result where the [[common law]] of {{t|contract}} fails to. | *{{casenote|Chudley|Clydesdale Bank plc}} — a classic case where the [[CRTPA]] delivers a sound result where the [[common law]] of {{t|contract}} fails to. | ||
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{{sa}} | {{sa}} | ||
*[[Privity of contract]] | *[[Privity of contract]] | ||
{{egg | {{egg}} | ||
{{ref}} | {{ref}} |