s.5Variation and rescission of contract
5
Section 5Part 0 —

Variation and rescission of contract

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Where a third party has a right under section 4 to enforce a term of the contract, the parties to the contract may not, by agreement, rescind the contract, or vary it so as to extinguish or alter his entitlement under that right, without his consent if —
the third party has communicated his assent to the term to the promisor;
the promisor is aware that the third party has relied on the term; or
the promisor can reasonably be expected to have foreseen that the third party would rely on the term and the third party has in fact relied on it.
The assent referred to in subsection (1)(a) —
may be by words or conduct; and
if sent to the promisor by post or other means, shall not be regarded as communicated to the promisor until received by him.
Subsection (1) is subject to any express term of the contract under which —
the contract may be rescinded or varied without the consent of the third party; or
the consent of the third party is required in circumstances specified in the contract instead of those set out in subsection (1)(a) to (c).
Where the consent of a third party is required under subsection (1) or (3), the court may, on the application of one or more of the parties to the contract, dispense with his consent if satisfied that it is just and equitable to do so having regard to all the circumstances.
The court may, on the application of one or more of the parties to a contract, dispense with any consent that may be required under subsection (1)(c) if satisfied that it cannot reasonably be ascertained whether or not the third party has in fact relied on the term.
If the court dispenses with a third party's consent, it may impose the conditions it thinks fit, including a condition requiring the payment of compensation to the third party.

Cross References