(c)  German law

parties and the third party, whether it is to be understood as contractual, promissory, or as having some other nature.

The views of academics are also inconclusive as to the understanding of the nature of the third party’s right. Markesinis has remarked that in German law ‘it is generally agreed (but not expressly stated) that the acquisition of a right by the third party depends upon the intention of the promisor and the promisee’.87 But this still does not tell us what the nature of the third party’s right to performance is. A view has been advanced that the relationship between promisor and third party is ‘quasi-contractual’ (vertragsähnlich),88 by which it seems is meant a right akin to a contractual one (rather than one arising under unjustified enrichment).

The uncertain position which prevails today need not have been the case. The codal provision concerning the rights of third parties was originally suggested to be an example of a unilateral promise in favour of the third party, but this approach did not win out. This approach had been promoted by von Kübel, the editor of the contract portions of the draft of the BGB. Von Kübel saw the third party’s right as arising without any involvement on the part of the third party, by virtue of a unilateral promise in its favour. He rejected the view that the third party should be seen as being the recipient of an offer, one which it would be required to accept before liability on the promisor’s part could arise. Von Kübel’s promissory approach was however not maintained as the drafting process continued. This resulted in the promissory link between promises of reward (which did make it into the BGB as rare examples of an enforceable unilateral promise) and the right of a third party under a contract being lost.89 Nor, however, was the final position that an acceptance by the third party was required: no such acceptance is needed, though the third party is entitled to reject the benefit.90

The loss of von Kübel’s position, which would clearly have defined the nature of the third party’s right in German law, means that the most that it seems possible to say about the right of a third party under a contract in German law is that it is a right which, though not that of a contracting party, arises under contract.

As to the uses to which German law puts third party rights in contract, Markesinis has identified eleven fact situations which have commonly

87Markesinis et al., German Law of Contract, p. 197 (the authors’ italics).

88See Hallebeeek and Dondorp, Contracts for a Third Party Beneficiary, p. 156.

89For a summary of the relevant history, see Zimmermann, ‘Vertrag und Versprechen’, pp. 473–4.

90BGB §333.

been held to fall under the regime of contracts in favour of third parties.91 Some of these would also clearly be treated as enforceable third party right scenarios in Britain. Thus, widows’ insurance schemes and workers’ retirement schemes, insurance contracts stipulating for performance to a third party, and travel contracts where family members are to benefit as well as the contracting party, would be so categorised, under a mixture of common law (in Scotland) and statute (in Scotland and England).92 Others, however, would be less likely to fall within a third party rights regime: most cases concerning medical treatment are regarded as tortious/delictual, as they concern treatment by agents of the National Health Service with whom no contract will normally arise, though private medical contracts for the treatment of a third party might conceivably give rise to an enforceable third party contractual right; consignees of goods which are damaged in transit also fall within the German regime, whereas in the UK, while such parties might recover their losses indirectly at common law under the principle of ‘transferred loss’ discussed below,93 that is not an independent third party claim as such.94

Whatever the nature of the right in favour of the third party in German law, it seems clear that another institution often discussed alongside it, that of the contract with protective effect for third parties (Vertrag mit Schutzwirkung für Dritte, or ‘VSD’ for short), cannot be characterised as arising out of promise, except if one were to say that contractual promises are being extended for policy reasons to offer protection for third ­parties.95 But essentially this aspect of German law uses contract to perform what would be dealt with tortiously/delictually (with one notable exception, discussed below) in other legal systems. So, a major tranche of the cases under the VSD doctrine relate to personal injury or physical damage caused by a contracting party to third parties or their property. The VSD operates here to supplement a very narrow provision of the BGB relating

91Markesinis et al., German Law of Contract, p. 187.

92Many cases are now dealt in England under the Contracts (Rights of Third Parties) Act 1999. However, more specific statutes govern certain factual cases, including the Married Women’s Property Act 1882, s. 1(1) of the Marine Insurance Act 1906, the Third Parties (Rights Against Insurers) Act 1930, s. 47 of the Law of Property Act 1925, and s. 148(7) of the Road Traffic Act 1988.

93See further below at pp. 320ff.

94In German law, the relevant law is found in Book 4, Part 4 (§§407–75h) of the Commercial Code (HGB), the contract of carriage being seen as a contract for the benefit of a third party.

95For a summary of the relevant law, see Markesinis et al., German Law of Contract, pp. 204–14.

to vicarious liability for the torts of employees.96 The other major tranche of cases dealt with under the VSD relates to pure economic loss, and was developed from the 1960s onwards, beginning with a famous case imposing liability on a notary towards disappointed beneficiaries of a testator (and thus similar to White v. Jones) referred to as the Testamentfall case.97 These cases were developed to overcome the exclusion of liability for negligently inflicted pure economic loss under §823(1) BGB. The notable exception to the fact that the VSD covers cases that would normally be classified tortiously elsewhere is the exclusion clause conceived in favour of a third party. This is treated in German Law as a type of contract with protective effect for third parties,98 mirroring the contractual (and not tortious) treatment meted out to such clauses in England (under the 1999 Act) and Scotland (at common law).

(d)  Model law

Principle 4 to the DCFR explains that the DCFR takes what Common lawyers would style contractual privity for granted: it is said to be ‘selfevident that parties can contract only for themselves, unless otherwise provided, and that contracts, as a rule, regulate only the rights and obligations between the parties who conclude them’. The DCFR spells out exceptions to this position, one of these exceptions being the stipulatio alteri. Article II.-9:301(1) provides that the

parties to a contract may, by the contract, confer a right or other benefit on a third party. The third party need not be in existence or identified at the time the contract is concluded.99

This article does not spell out positively the nature of the third party’s entitlement(aspromissory,suigeneris,orwhatever).Infact,ArtII.-9:301(2) adds that the ‘nature and content of the third party’s right or benefit are determined by the contract’. This would suggest that parties may, if they want, confer a right which is in the nature of a unilateral promise on a third party. That possibility seems to be confirmed by Article II.-9:302, which provides for the default position, applicable in cases where one of the contracting parties is required to render a performance to the third party, that (in the absence of anything to the contrary in the contract)

96 §831. 97 BGH NJW 1965, 1955.

98See Markesinis and Unberath, German Law of Torts, p. 540.

99The provisions notably include both right and benefit conceptions of a third party’s right: see earlier discussion at n. 1 to this ch.