Page:Contracts (Rights of Third Parties) Act 2001.pdf/4

Rh (7) In this Act, in relation to a term of a contract which is enforceable by a third party—
 * "promisee" means the party to the contract by whom the term is enforceable against the promisor;
 * "promisor" means the party to the contract against whom the term is enforceable by the third party.

Variation and rescission of contract

3.—(1) Subject to this section, where a third party has a right under section 2 to enforce a term of the contract, the parties to the contract may not, by agreement, rescind the contract, or vary it in such a way as to extinguish or alter the third party's entitlement under that right, without his consent if—
 * (a) the third party has communicated his assent to the term to the promisor;
 * (b) the promisor is aware that the third party has relied on the term (whether or not the third party has knowledge of its precise terms); or
 * (c) the promisor can reasonably be expected to have foreseen that the third party would rely on the term and the third party has in fact relied on it (whether or not the third party has knowledge of its precise terms).

(2) The assent referred to in subsection (1) (a)—
 * (a) may be by words or conduct; and
 * (b) if sent to the promisor by post or other means, shall not be regarded as communicated to the promisor until it is received by him.

(3) Subsection (1) is subject to any express term of the contract under which—
 * (a) the parties to the contract may by agreement rescind or vary the contract without the consent of the third party; or
 * (b) the consent of the third party is required in circumstances specified in the contract instead of those set out in subsection (1) (a), (b) and (c).

(4) Where the consent of a third party is required under subsection (1) or (3), the court or arbitral tribunal may, on the