Kepong Prospecting v Schmidt Schmidt, a consulting engineer has assisted in obtaining a permit for iron ore in the State

of Johore. Tan promised Schmidt a tribute of 1% of the selling of all iron produced and soled. Subsequently, Tan set up a company called Kepong Prospecting Ltd. Schmidt also helped in the subsequent formation of the Company, Kepong Prospecting Ltd. In the year 195 4, after the Company was formed, an agreement was entered into between the Company and Tan whereby the company took over the obligations to pay Schmidt 1% of all ore that might be produced and sold. However Schmidt was not party of the agreement. In 1955, the Company made an agreement with Schmidt agreeing to pay the 1% tribute. Schmidt claimed from the company the payment of 1% tribute from both 1954 and 1955 agreements. Held: Schmidt could not claim from the first agreement (1954) due to the fact that he was not one of the parties to the contract. Section 2(a), (b), (c), support the English Rule that only parties to the contract can sue. However, he can claim from the second agreement (1955) because he was a party to the contract.