Theoretical Study Of The Third Person Of The Contract

The Third Party in contracts comes into being as a result of the breakthrough inthe doctrine of the privity of contract. The breakthrough is based on a profoundtheoretical and social foundation, and its existence itself is of special value. Thedoctrine of the privity of contract, which derives from the principle of partyautonomy, takes effect only between parties involved. The rights of contract can beimplemented only against the opposite party rather than the third party, and theobligation must be fulfilled by the two parties involved rather than the third party.The breakthrough in the doctrine of the privity of contract refers to the expansion ofcontract effectiveness, that is, apart from the parties involved, the establishment andexecution of contracts exert influence on the rights and obligations of the third party.As the third party have a legal link with either or both of the parties concerned, andits behavior also has bearing on the legal status of the parties involved or the otherway round. The emergence of the Third Party in contracts comes as a result of thebreakthrough in the doctrine of the privity of contract. In the classification of thirdparties, it is crucial to make a distinction between the Actual Third Party and theNominal Third Party in the investigation of what the Third Party is.The Third Party in contracts claims its existence mainly in the following threeforms: (1) the Beneficiary Contract; (2) the Contract of Responsibility; (3) theBreach of Creditor's Contract Rights. (1) As the receiver of benefits, the third partyin the Beneficiary Contract benefits from the Institution of Judge Chosen by Parties, while enjoying an independent right of petition. In this case, the third party is ActualThird Party in nature. (2) As an assistant in the execution of contracts, the third partyin the Contracts of Responsibility does not perform obligations and therefore it doesnot shoulder the responsibility of compensating. In this case the third party isNominal Third Party in nature. (3) The third party in the case of infringing on thecreditor's contract rights refers to the intentional breach of other creditor's lawfulcontract rights while being aware of the existence of his rights. So the third party in this case should be the Independent Civil Body responsible to the infringement onthe creditor's contract rights. The third party in this case is the actual third party innature. Therefore, in the current legislation of contract laws, the third parties in thesethree cases are representative of the actual Third Party and the Nominal Third Partyrespectively. Since the embodiment and the legal status of the Third Party varyaccording to different cases, the profound and insightful discussion in this regardcontributes to the perfection of designing the third party articles in contract laws.Both in the law system of European Mainland and the law system ofAnglo-American countries, the theory concerning the Third Party in contracts isformulated not only for the sake of meeting the demands of economic development, but also as a result of the theoretical development regarding Contract Law. In thelaw-making process even in foreign countries, the designing of the Third Partysystem has also undergone a changing process from excluding the third party at firstto accepting it at last. To meet the requirements of improving social life and lawsystem, the laws in foreign countries break away from the yoke of the doctrine of theprivity of contract. Both in the law system of European mainland and the law systemof Anglo-American countries, the Actual Third Party theory is established aslegitimate Third Party contract theory. However, as far as the making of contractlaws in China, the law-makers stubbornly adhere the doctrine of the privity ofcontract and dare not made any further breakthrough in face of the existing theories.Nevertheless, the practices, which some foreign countries employ in designingconcrete systems for contract laws, can serve as significant inspirations of improvingthe provision of the Third Party in the legislation of contract laws in China.China adopts a quite conservative attitude to the Third Party theory. As anexception in the legislation of China, the actual Third Party is stipulated in speciallaws, for instance, the stipulation of the beneficiary in the Insurance Law, whereas inthe Contract Law there is no stipulation about the Actual Third Party. In the ContractLaw of China, there are only rudiment stipulations with regard to such aspects as theTransfer of Contract, the Contract Preservation, the Beneficiary Contract, the Contracts of Responsibility and the breach of creditor's contract rights. In general, the Chinese Contract Law does not establish the Actual Third Party, in other words, in the legislation of contract laws in China the third party exists mostly as nominalthird party rather the actual third party. If there emerges the Third Party, theprinciples of Contract Relativity are applied so as to bring about a binding force inlaw enforcement. Therefore, these stipulations need to be renovated, and the ThirdParty should be granted the status of the Actual Third Party, for instance, in the caseconcerning the right of direct petition in the Beneficiary Contract, the responsibilitythat the third party should burden in the case of being unable to execute the contractand thus inflicting the damage to the relevant parties. As for the Contract ofResponsibility, the attempt should also be made to stipulate that the third partyshould be answerable to the inability of executing the contract. Through theoreticalenquiry we can renovate the provision of the third party in contract laws in China soas to attain the goal of perfecting the theory of contract law and improving thesystem of contracts.