On The System Of Third Party Beneficiary Of The Contract For The Benefit Of Third Party

The contract for the benefit of third party is developed with the development of economy. It is a breakthrough in the principle of contract relativity. The contract for the benefit of third party has been established in legislation and in practice as well and rights of third party beneficiaries have been well protected in foreign countries. Standing to the privity doctrine, Chinese Contract Law that was put into practice in 1999 recognizes that a third party beneficiary has the right to receive the benefit agreed in the contract, but denies his right to enforce the contract on the other hand. This laggard legal system cannot answer for the fundamental tenet and basal principle of contract law, and cannot protect rights of third party beneficiaries as well. So it is important to erect third party beneficiary rules in our country.This essay consists of four chapters besides an introduction and a tag.Chapter I covers four sections and discusses the following problems: creation of the contract for the benefit of third party in Common Law and Civil Law; its quality and value; basic relationship and its concept; confirmation and types of third party beneficiary. All those basic researches are making preparations for deeper study.Chapter II deals greatly with rights of a third party beneficiary. In Section One, foundation of third party beneficiary theory is discussed. Through comparison methods of foreign countries, the contract for the benefit of third party should endow direct right for a third party beneficiary. In Section Two, effectiveness standard for a third party beneficiary's rights is amended. In Section Three, rights of a third party beneficiary include: right of claim to fulfill a contract and relative rights, right of defense from alteration or deliquesce, right of receiving payment and right of claim to protect the creditor's right. In Section Four, conditions for a third party beneficiary to have right of action are given. Upon the condition of ambiguous regulation, we should adopt British practice, the practice of counterevidence.Chapter III deals with the negative protection of rights of a third party beneficiary. When a contract for the benefit of third party is rescinded, or withdrawn, or extinguished, or breached , what should be done to protect third party beneficiaries.Chapter IV deals first with status quo of the contract for the benefit of third party in our country. Article 64 in Contract Law 1999 is not really contract for the benefit of third party. It is just a style of contract implementation, that is to say, the debtor performs the contract for the third party beneficiary. Although Subprovision of Contract Law 1999 and other particular laws ( Insurance Law, Trust Law, Maritime Law, etc.) regulate contract for the benefit of third party, a uniform general basic set pattern is lacking.In conclusion, I give my opinions on erecting the contract for the benefit of third party and Third Party Beneficiary Rules: The contract for the benefit of third party should be regarded as a special contract and a third party beneficiary should have direct right of claim and right of action.Admitting contract for the benefit of third party doesn't collide with Privity Doctrine of contracts, because it doesn't harm civil subject's freedom but respects the interest of the parties involved, which is the spirit of autonomy of private law. Admitting the contract for the benefit of third party can also protect reliance of third Party Beneficiaries, ease burden of actions and economize social resources. So we should regulate rules for the contract for the benefit of third party to protect rights of third party beneficiaries.