- (b) by way of counterclaim any matter not arising from the contract,
that would have been available to him by way of defence or set-off or by way of counterclaim against the third party, as the case may be, if the third party had been a party to the contract.
(5) Subsections (2) and (4) are subject to any express term of the contract as to the matters that are not to be available to the promisor by way of defence, set-off or counterclaim.
(6) Where, in any proceedings brought against him, a third party seeks to enforce a term of a contract (including, in particular, a term purporting to exclude or limit liability) in reliance on section 2, he may not do so if he could not have done so (whether by reason of any particular circumstances relating to him or otherwise) had he been a party to the contract.
Enforcement of contract by promisee
5. Section 2 shall not affect any right of the promisee to enforce any term of the contract.
Protection of promisor from double liability
6. Where under section 2 a term of a contract is enforceable by a third party, and the promisee has recovered from the promisor a sum in respect of—
- (a) the third party's loss in respect of the term; or
- (b) the expense to the promisee of making good to the third party the default of the promisor,
then, in any proceedings brought in reliance on that section by the third party, the court or arbitral tribunal shall reduce any award to the third party to such extent as it thinks appropriate to take account of the sum recovered by the promisee.
Exceptions
7.—(1) Section 2 shall not confer any right on a third party in the case of a contract on a bill of exchange, promissory note or other negotiable instrument.
(2) Section 2 shall not confer any right on a third party in the case of any contract binding on a company and its members under section 39 of the Companies Act (Cap. 50).
