Beswick v Beswick [1968] AC 58

Peter Beswick transferred his coal business to his nephew. In return, the nephew agreed to employ him as a consultant during his life and pay his widow an annuity of £5 a week after his death. When Peter died, the nephew made one payment and then refused further payments. Mrs Beswick became administratrix of her husband's estate. She sought to enforce the annuity both as its intended beneficiary and in her representative capacity. The dispute concerned whether either capacity entitled her to compel performance of an agreement to which she personally had not been a party.

First, if C as the third party to the contract was entitled to receive money from D. Second, if C, as the administrator, was entitled to specific performance of the agreement.

The House of Lords held that Mrs Beswick could not enforce the promise simply in her personal capacity as its intended beneficiary. She was not a party to the agreement, and the statutory provision relied upon did not abolish the common law rule of privity.

However, she could sue as administratrix of her husband's estate, standing in the position of the contracting promisee. Specific performance was appropriate because an award reflecting only the estate's financial loss would not adequately secure the promised annuity. The nephew was therefore required to perform the payment obligation. The decision preserved the distinction between a third party's own right of enforcement and the promisee's right to insist on performance for that third party's benefit.

At common law an intended third-party beneficiary does not acquire a contractual right merely because the agreement benefits them. The contracting promisee, or their personal representative, may obtain specific performance where damages are inadequate. Statutory third-party enforcement under the 1999 Act is a separate modern route.

Beswick illustrates both the restriction imposed by privity and the capacity of specific performance to prevent it producing an ineffective remedy. Mrs Beswick succeeded as personal representative, not by a general judicial abolition of third-party rights restrictions. The Contracts (Rights of Third Parties) Act 1999 subsequently created an additional enforcement route for qualifying beneficiaries. Modern problems therefore require separate consideration of the Act, the contract's construction and the promisee's own remedies, while preserving the historical reasoning of Beswick.