LEGAL PRINCIPLE: EQUITY AND TRUSTS — Rectification — Standing to Seek Rectification — Only Parties to Instrument or Their Privies Entitled to Seek Rectification
PRINCIPLE STATEMENT
As a general rule, a contract cannot confer rights or impose obligations on any person except the parties to it or their privies; mere benefit from performance does not give a right to enforce the contract.
RATIO DECIDENDI (SOURCE)
Per Ayoola, JSC, in First Fuels Ltd v. The Vessel 'Leona II' (2002) NLC-3102001(SC) at pp. 14–15; Paras A–B.
"The law is clear that, as a general rule, a contract cannot confer rights or impose obligations on any person except the parties to it or, as an exception to the general rule, a person on whom such parties confer a benefit who is to be distinguished from a person who may benefit from the contract. That a person may benefit from the performance of a contract does not alone give him a right to enforce the contract."
EXPLANATION / SCOPE
Only parties to a contract or their privies can seek rectification. A mere beneficiary of performance cannot enforce the contract. The principle applies the doctrine of privity of contract. The rule ensures that only those with a legal interest can seek equitable remedies. The exception is for trust beneficiaries. The court will not allow strangers to interfere. The principle applies to rectification of contractual documents. The party seeking rectification must show that they are party to the instrument or a privy. The rule promotes certainty in contractual relations. The court will not grant standing to mere beneficiaries.
