Contracts to the detriment of a third party: Developing a model inspired by Jewish law

When two parties enter into a contract, a third party often incurs losses as a result of that contract. Are there circumstances in which the harm the contract causes to the third party’s interest is actionable? The phenomenon of contracts to the detriment of a third party presents a significant legal challenge. It is one of those interesting border-line cases that sharpens the problematic confrontation between the principle of freedom of contract and the need to protect the interests of third parties. This article argues that contemporary legal systems treat the phenomenon of contract to the detriment of a third party in piecemeal fashion by way of local arrangements in a number of specific areas of law. In contrast, Jewish law seems to offer a model for the principled and comprehensive treatment of the phenomenon as a whole. Therefore, Jewish law can profitably contribute to the modern legal discourse. At the same time, modern legal theories may enhance our understanding of Jewish law itself.