generalised right of third parties to a contract to enforce in their own name a right conceived under the contract in their favour, there is no agreement on the exact nature of such a right. In some systems, there is at least a majority (if not universal) view that the nature of the third party’s right is promissory. Such an analysis is founded on the ius commune promissory tradition. Of the mixed systems, Scots law is clearly in this camp, Louisiana is arguably so, but South Africa, while once taking a clearly promissory view, now arguably adopts a contractual option approach. In German law the promissory view was almost adopted when the BGB was enacted, but it lost out to a non-specific characterisation of the third party’s right. Under English law, though the 1999 Act at no point states expressly that the third party is enforcing a promise conceived in its favour, the import of the Act would appear to be to that effect. Only in Scots law has the tradition clearly been that the third party is a direct recipient of a promise made to it, one arising upon delivery of the contract or when an equivalent to delivery occurs; in the other systems adopting a promissory view, it is arguable that the third party is, exceptionally, being given a right to enforce a promise made to the other contracting party, rather than to enforce a promise made directly to it, though this point seems not to have been explored sufficiently to draw any firm conclusions on the matter.

In each of the systems studied, it is clear that the impetus for the recognition of third party rights was in large part a concern that those who undertake to confer a benefit on a third party should be held to their word, with a secondary concern being to protect the third party’s reliance placed upon the promise in its favour. The development of third party rights thus represents an equitable development of the law beyond the confines of the default rule that only parties to a contract derive rights under it. Such a development is laudable as upholding the intention of the promisor; less so are developments in some systems which have led to a protection of the performance interest of third parties through extensions to the law of tort. Such developments run the risk of blurring the boundaries between contract and tort, especially where quasi-promissory language such as ‘assumption of responsibility’ is used to describe non-voluntary tortious duties. The DCFR’s approach marks a commendable way forward in this field of contract law.

4.  Assignment

The relationship between third party rights narrowly so called (the subject of the discussion thus far) and assignment is a complex one. There

is an evident similarity between the two institutions, in that both allow a third party to enforce rights under a contract. The distinction is that, with third party rights narrowly so called, the contracting parties intend to confer upon a non-contracting third party distinct rights of its own; in the case of assignment, one of the contracting parties forms an intention to transfer its own pre-existing rights to a third party, who takes the place of the transferor as holder of the rights in question. The distinction rests upon the intention of the parties, thus locating the essence of both doctrines in the will of the contracting parties. The answer to an enquiry as to which status was intended for a third party, that of assignee or tertius, ought therefore to depend upon a factual enquiry as to such intention.

An assignment (or assignation, cession, or transfer of rights, depending upon jurisdictional terminology), like donation, is a transfer of something (in the case of assignment, personal rights) to another party. Where it is duties rather than rights which are transferred, the terms ‘delegation’ or ‘substitution of debtor’ may be used, though one also encounters the term assignment being applied to transfers of debts.101 Though any personal rights might be the subject of an assignment, in what follows the discussion will be restricted to contractual rights.

Considering the matter purely as one of principle, the question may be put whether a high regard for a strict enforcement of promises according to their terms ought to lead to a prohibition on assignment save by express agreement of the original contracting parties. On one view, it ought not. This view posits that a contractual right promised to a party forms part of that party’s assets, and that one should be able to dispose freely of one’s assets as one wishes, unless there are sound policy reasons for preventing such a free disposal. A claim which one has to a contractual performance ought therefore, on this view, to be as readily disposable as any other part of one’s assets. This argument is persuasive to an extent, though it ignores the fact that the peculiar feature of a promise as an asset is that a promise is an undertaking of A’s to perform in favour of B and (unless otherwise stipulated) B alone: it is not an undertaking of A to perform in favour of C or anyone else, and it seems irrelevant to A that B might wish C to receive the benefit of the pledged performance. Recognition of this special feature of promises as assets might be argued to mitigate against any free right to assign the benefits of a contractual performance to another

101The substitution of one debtor for another can alternatively be achieved by novation, though in that case the original debt is seen as being extinguished and replaced by a new debt.

(a)  English law103

In modern English law, assignments are governed by section 136 of the Law of Property Act 1925, which stipulates that they must be constituted ‘by writing under the hand of the assignor’, though a failure to comply with this requirement (or the further requirement of written notification of the assignment by the assignor or assignee to the debtor) may nonetheless create an equitable assignment for which nothing more is required than an act which demonstrates the clear intention of the assignor to assign the rights in question.104 An equitable assignment, which may be in any form, is undertaken either by intimation of the assignment by assignor to assignee, or by assignor requesting the debtor to perform in favour of the assignee.105

The nature of both assignments complying with the Law of Property Act as well as equitable assignments is therefore that of a unilateral judicial act undertaken by the assignor. While, in addition, intimation to the debtor is desirable for equitable assignments and required for statutory ones, the consent of either debtor or assignee is not (unless the contract or statute so specifies) required as a constitutive part of the assignment.

An assignment might, of course, be required by virtue of an obligation in a preceding contract between A and C requiring A to effect the assignation in C’s favour, though if the circumstances permitting such an assignment in C’s favour are the subject of control in A’s contract with B, compliance with such controls will be necessary if the assignment is to be valid.106

(b)  The mixed legal systems

In Scotland, an assignation is a bilateral juridical act (though not a contract) requiring both an intentional conveyance of a claim by the cedent and acceptance of the assignation by the assignee.107 In addition,

103See, on English law, Smith, Law of Assignment; Tolhurst, The Assignment of Contractual Rights.

104However, if the assignment is an equitable one, the debtor continues to receive a valid discharge of his debt through payment to the assignor rather than the assignee until notification of the assignment is made to him.

105See Beale, Chitty on Contracts, para. 19–021.

106St Martin’s Property Corporation Ltd v. Sir Robert McAlpine & Sons Ltd [1994] 1 AC 85, [1993] 3 WLR 408, [1993] 3 All ER 417.

107Anderson, Assignation, para. 1–02.

intimation of the assignation to the debtor must be made by either assignor or assignee before the act of transfer is effected. The general rule is that (subject to any restrictions or prohibition in the contract) assignation is permitted, and that both the assignation and the intimation of it to the debtor may be constituted in any form. Thus an assignation might be made orally by the assignor (a simple statement such as ‘I hereby assign all my rights under this contract to you’ would suffice), or constituted in a handwritten or typed document, whether signed by the assignor or not. Formalities apply in the case of the assignation of certain types of right, principally real rights relating to land.108 While the transfer of the rights may be preceded by a contract or unilateral promise by which the assignor undertakes to effect the assignation, that is not a requirement of a valid assignation. The act of transfer which constitutes the assignation of rights in Scots law is thus not itself promissory in nature, though it may be preceded by a promise to assign.

In South Africa, there is, as in Scotland and England, a general presumption in favour of cession (as South African law calls assignment) without the need for the debtor’s consent, again subject to any agreed or statutory restrictions. The act of cession itself (often referred to as the pactum cessionis) is, as in Scotland, a type of bilateral juridical act, dependent therefore upon the declarations of will of both cedent (assignor) and cessionary (assignee). It is not, however, a contract, though it is characterised by both the intention of the cedent to effect the transfer and the concurrence in, or acceptance of, such act by the cessionary, and hence can be described as characterised by ‘agreement’ in a broad sense.109 The principal difference from the Scottish approach is that notice to the debtor is not a requirement of the cessionary act, but merely something which acts as a precaution designed to prevent the debtor’s performance to the wrong party. Cession may be preceded by, or occur simultaneously with, a contract of cession by which the cedent undertakes to effect the transfer, but this is not a necessary requirement. As in Scotland, therefore, the act of cession in South African law is not itself promissory in nature, even though it may be preceded by a contractual promise to effect the cession.

108Requirements of Writing (Scotland) Act 1995, s. 1(2)(a)(i), (b).

109See Scott, Cession, p. 7: ‘As cession is an act of transfer, it is incorrect to refer to cession as a contract.’ She notes (p. 8), however, that the act of cession is often embodied in the same document as the contract in terms of which the cedent undertakes to effect the transfer.