MGSC30H3 Chapter 12: Chapter 12 Notes
Document Summary
Chapter 12 the extent of contractual rights notes. The general common law rule with respect to contractual rights and liabilities states that no person may acquire rights or liabilities under a contract to which he or she is not a party. By novation, a party may replace another in a contract and become bound if all parties consent. The contract is a new agreement, however, and the replaced party no longer has rights or liability under it. In some cases, parties may acquire rights if they are in a position to establish that a constructive trust for their benefit was created by a contract. Apart from these exceptions, the common law rule applies to all contracts unless, of course, a statute specifically provides a right to a third party. Rights under a contract may also be performed by another person under vicarious performance, unless the contract calls for personal performance.
