15.Section 3 enables the promisor, in a claim by the third party, to rely on any defence or set-off arising out of the contract and relevant to the term being enforced, which would have been available to him had the claim been by the promisee. He may also rely on any defence or set-off, or make any counterclaim, where this would have been possible had the third party been a party to the contract.
16.Subsection (2) can be illustrated as follows-
17.Subsection (3) can be illustrated as follows-
P1 and P2 contract that P1 will pay P3 if P2 transfers his car to P1. P2 owes P1 money under a wholly unrelated contract. P1 and P2 agree to an express term in the contract which provides that P1 can raise against a claim by P3 any matter which would have given P1 a defence or set-off to a claim by P2.
18.Subsection (4) makes it clear that the promisor also has available any defence or set-off, and any counterclaim not arising from the contract, which is specific to the third party. It can be illustrated as follows.
19.Subsection (5) makes subsections (2) and (4) subject to any express term of the contract which narrows the defences or set-offs available under section 3(2) or narrows the defences, set-offs or counterclaims available under section 3(4). For example-
20.Subsection (6) ensures that an analogous approach to that set out in subsections (2) to (5) applies where the proceedings are brought against the third party and he seeks to avail himself of, for example, an exclusion section.
Commentary Section 3: Defences etc. available to promisor