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Report No. 13

Section 37A.- After section 37 of the principal Act, the following section shall be inserted, namely:-

"37A. Benefits conferred on third parties.

(1) Where a contract expressly confers a benefit directly on a third party, then, unless the contract otherwise provides, it shall be enforceable by the third party in his own name, subject to any defences that would have been valid between the contracting parties.

(2) Where a contract expressly conferring a benefit directly upon a third party has been adopted, expressly or impliedly, by the third party, the parties to the contract cannot substitute a new contract for it or rescind or alter it so as to affect the rights of the third party."

Indian Contract Act, 1872 Back

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