Third parties may become involved in the contractual relationship between others such as stipulatio alteri (for the benefit of a third-party beneficiary). The third-party beneficiaries may claim the benefit only once they have accepted it and may sue for performance.

Excerpt from judgment

The recent SCA judgment in Loggenberg NO v Maree (286/17) [2018] ZASCA 24 (23 March 2018) provides a good example.

“[22] The submission is unsound. A typical stipulatio alteri or contract for the benefit of a third party, is a contract concluded between A and B for the benefit of a third party C, who by accepting the benefit becomes a party to that contract so that it is A and C who are bound to each other.[15] Such a contract has been recognised as enforceable in relation to a company not yet formed.[16]

So, nothing turns on the fact that the Trust was not in existence when the oral agreement was concluded. It appears that the agreement was a fairly typical stipulatio alteri. Once the Trust was established, by accepting the benefit of the oral agreement, it could obtain the right Mr Loggenberg contracted for, ie the transfer of Weltevreden. And since the oral agreement was capable of being construed other than as a sale, it would not be prohibited by s 2(1) of the Act. Of course, it is an entirely different matter whether the oral agreement can be proved and whether the Trust indeed accepted the benefit of that agreement. But these are matters for trial, not exception“. [ footnotes omitted]