Jurisdiction(s):
United Kingdom

High Court confirms express third-party enforcement for security agent under Contracts (Rights of Third Parties) Act 1999 s1(1)(a) (England and Wales)

Published on: 23 May 2025

Published by a LexisNexis Construction expert

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Article summary

Facts

The defendant in the proceedings, Ms Lawrence, entered into a loan agreement with a lender, for whom HNW, the claimant in the matter, acted as the security agent for the lender. The purpose of the loan agreement was to help finance Ms Lawrence’s development of a property. That property was also secured separately by a legal mortgage, operating as continuing security to the lender under the loan terms. Although HNW was not itself a party to the loan agreement, the loan agreement nonetheless contained an express provision said to grant HNW certain third party rights to enforce its terms; namely, that, even though HNW Lending Ltd was not a party to this Loan Agreement, HNW Lending Ltd could take the benefit of and specifically enforce each and every express term of the Loan Agreement, together with any term implied under it pursuant to the Contracts (Rights of Third Parties) Act 1999. The charge stated that it was made between Ms Lawrence as borrower and HNW, described as acting as security agent for the lender as defined in the loan agreement. When Ms Lawrence defaulted on her loan repayments, HNW sought to enforce the loan agreement to gain possession of...

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