LLB202 Study Guide - Final Guide: Burns Philp

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27 Jun 2018
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PRIVITY
Attempts to confer benefit on third parties
General rule
Only the parties to a contract are legally entitled to enforce it.
This can be both a benefit, in that a third party cannot be subjected to liabilities imposed by
the contract but also a burden as they cannot receive benefits conferred to them by the
contract (Wilson v Darling Island Stevedoring Co)
In order to receive a benefit, the third party requires the promisee to commence an action to
ensure that their benefit is enforced
Obviously this is problematic as the promisee may have no interest in commencing an action
for the benefit of a stranger (Trident v McNeice)
5.1 Statutory exemptions to the rule
5.1.1 The Property Law Act
As a statutory exception to the general rule, Section 55(1) provides that:
upon acceptance, a beneficiary may enforce a promise to confer a benefit upon him providing
that the following elements have been satisfied.
Sub-section 6 defines ‘acceptance’ as assent by words or conduct given by the beneficiary or
his agent to the promisor or his agent within the time and in the manner prescribed in the
contract, or if no manner or time is prescribed within a reasonable time of the promise
coming to the notice of the beneficiary.
5.1.2 Elements:
5.1.2.1 Beneficiary
A beneficiary is an identifiable person other than the promisor or promisee (Property Law
Act s55(5).
A beneficiary must be expressly named or described.
An ‘incidental’ beneficiary cannot claim the benefit under the section (Re Burns Philp
Trustees; Robt Jones (363 Adelaide Street) Pty Ltd v First Abbott Corporation Pty Ltd)
5.1.2.2 Promise
Under s55(6) the promise must have:
Intended to be legally binding; and
Intended to create a duty enforceable by a beneficiary
-A duty imposed by statute will not satisfy the necessary intention
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Document Summary

Only the parties to a contract are legally entitled to enforce it. In order to receive a benefit, the third party requires the promisee to commence an action to ensure that their benefit is enforced. Obviously this is problematic as the promisee may have no interest in commencing an action for the benefit of a stranger (trident v mcneice) As a statutory exception to the general rule, section 55(1) provides that: upon acceptance, a beneficiary may enforce a promise to confer a benefit upon him providing that the following elements have been satisfied. A beneficiary is an identifiable person other than the promisor or promisee (property law. A beneficiary must be expressly named or described. An incidental" beneficiary cannot claim the benefit under the section (re burns philp. Trustees; robt jones (363 adelaide street) pty ltd v first abbott corporation pty ltd) Intended to create a duty enforceable by a beneficiary.