7. Privity of contract and third party rights

2021 ◽  
pp. 307-358
Author(s):  
Robert Merkin ◽  
Séverine Saintier
Keyword(s):  
Common Law ◽  
Case Law ◽  
Contract Law ◽  
Third Parties ◽  
Third Party ◽  
The Third ◽  
The Subject ◽  
The Common ◽  
Contractual Obligations ◽  
Privity Of Contract

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines privity of contract, its relationship with consideration, and the ability of third parties to enforce contractual provisions for their benefit. The doctrine of privity of contract provides that the benefits of a contract can be enjoyed only by the parties to that contract and only parties can suffer the burdens of the contract. At common law, third party beneficiaries could not enforce a contractual provision in their favour so various devices were employed seeking to avoid privity. Statute now allows for direct third party enforcement but in limited circumstances. This chapter examines the background to privity and the attempted statutory reform in the Contracts (Rights of Third Parties) Act 1999 as it has been interpreted in the case law. The chapter also discusses the common law means of avoiding privity as illustrated by the case law, e.g. agency, collateral contracts, and trusts of contractual obligations. Finally, it assesses the remedies available to the contracting party to recover on behalf of the third party beneficiary of the promise, including the narrow and broad grounds in Linden Gardens Trust. It concludes by briefly considering privity and burdens—and the exceptional situations where a burden can be imposed on a person who is not a party to the contract.

11. Privity of contract and third party rights

2019 ◽  
pp. 519-570
Author(s):  
Robert Merkin ◽  
Séverine Saintier
Keyword(s):  
Common Law ◽  
Case Law ◽  
Third Parties ◽  
Third Party ◽  
The Third ◽  
The Subject ◽  
The Common ◽  
Contractual Obligations ◽  
Privity Of Contract ◽  
Selection Of

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines privity of contract, its relationship with consideration, and the ability of third parties to enforce contractual provisions for their benefit. The doctrine of privity of contract provides that the benefits of a contract can be enjoyed only by the parties to that contract and only parties can suffer the burdens of the contract. At common law, third party beneficiaries could not enforce a contractual provision in their favour so various devices were employed seeking to avoid privity. Statute now allows for direct third party enforcement but in limited circumstances. This chapter examines the background to privity and the attempted statutory reform in the Contracts (Rights of Third Parties) Act 1999 as it has been interpreted in the case law. The chapter also discusses the common law means of avoiding privity as illustrated by the case law, e.g. agency, collateral contracts, and trusts of contractual obligations. Finally it assesses the remedies available to the contracting party to recover on behalf of the third party beneficiary of the promise, including the narrow and broad grounds in Linden Gardens Trust. It concludes by briefly considering privity and burdens—and the exceptional situations where a burden can be imposed on a person who is not a party to the contract.

Contracts for the Benefit of Third Parties: The Singapore Law Perspectives

2018 ◽  
Author(s):  
ONG Burton
Keyword(s):  
Common Law ◽  
Contract Law ◽  
Third Parties ◽  
Third Party ◽  
The Third ◽  
The Status ◽  
The Common ◽  
English Law ◽  
The Third Party ◽  
Privity Of Contract

Singapore’s contract law framework, in the context of third party beneficiaries, has stayed faithful to the approach taken under English law. The common law in Singapore has adopted the privity of contract rule, various common law exceptions to the rule, and a statutory regime to empower third parties to enforce contractual terms in prescribed circumstances. The privity rule confines the benefits and burdens under a contract to the contract parties; only they have given consideration and only they can sue and be sued under it. However, various reasons support the third party beneficiary having some right to enforce that benefit and a range of common law mechanisms have been recognized by the courts to allow the third party to do this. Some are true exceptions, others operate by recharacterizing the status of the third party into that of a primary party, thereby eliminating the lack of privity. In cases where the third party may potentially be able to sue the promisor in tort, the basis for loosening the privity doctrine to permit the third party to sue the promisor in contract, and the character of the damages recoverable from the party in breach, requires closer scrutiny.

12. Third Party Rights (the Doctrine of Privity)

2021 ◽  
pp. 377-412
Author(s):  
André Naidoo
Keyword(s):  
Common Law ◽  
Case Law ◽  
Third Parties ◽  
Third Party ◽  
Commercial Importance ◽  
Starting Point ◽  
The Common ◽  
Privity Of Contract

This chapter highlights the doctrine of privity of contract; that means it is about the rights and obligations of third parties. The starting point is the basic common law rule of privity. At common law, third parties have no general right to enforce contracts made by others. Likewise, contracts made by others cannot impose obligations on third parties. This is a fairly straightforward principle and is based on sound reasons, but in practice privity has become a complex area. The existence of the rule resulted in a range of clever devices being developed to get around it, all of which are of commercial importance. And the rule against parties enforcing contracts made by others in particular was also severely criticized over the years for various reasons. The basis for such criticism resulted in some partial exceptions being developed in the case law, and ultimately in a statute—namely the Contracts (Rights of Third Parties) Act 1999. This complicates matters further because the Act only applies in certain circumstances and its application can be excluded by the terms of the contract. As such, there will be circumstances in which the common law exceptions and devices remain relevant, and they must therefore be studied alongside it.

3. Special duty problems: omissions and acts of third parties

2019 ◽  
pp. 49-59
Author(s):  
Kirsty Horsey ◽  
Erika Rackley
Keyword(s):  
Common Law ◽  
Third Parties ◽  
Third Party ◽  
Duty Of Care ◽  
The Third ◽  
The Common ◽  
Relationship Of ◽  
Special Duty

This chapter discusses the problem of when a duty of care arises in respect of negligent omissions, or for the actions of a third party. The common law takes the view that it would be too great a burden to impose liability upon a person for a mere omission, or for the actions of others. Despite this, duties can in fact be imposed in various ways, all of which focus on the reliance of the claimant upon the defendant. This can come about either by the previous conduct of the defendant, which induces reliance by the claimant that the defendant will continue to act in that way, or by reliance which comes out of a relationship of dependence between the parties. As regards third parties, a duty may arise where the defendant has control over or responsibility for the third party’s actions.

Conditions in Favour of Third Parties

1952 ◽  
Vol 11 (2) ◽  
pp. 240-257
Author(s):  
T. C. Thomas
Keyword(s):  
Common Law ◽  
Third Parties ◽  
Third Party ◽  
The Third ◽  
The Common ◽  
The Law ◽  
The Third Party

The purpose of this article is to consider the legal effects of a transfer of property by A to B subject to the performance by B of some obligation in favour of C, a third party to the transfer. The student of the law of contract is well familiar with the common law rule that no one who was not an original party to the contract is entitled to the benefit of that contract. But this rule creates hardship in particular cases and it has been shown that, in the main, three methods have been evolved to evade those unfortunate results. First, the legislature has intervened and provided C, the third party, with statutory rights. Secondly, the doctrine of agency has been invoked whereby C may claim that he is the principal of B. Thirdly, but with varying success, the trust concept has been pressed into service whereby C has sometimes been able to show that he is a beneficiary.

7. Privity of contract and third party rights

2021 ◽  
pp. 272-312
Author(s):  
Robert Merkin ◽  
Séverine Saintier ◽  
Jill Poole
Keyword(s):  
Contract Law ◽  
Third Parties ◽  
Third Party ◽  
Legislative Reform ◽  
The Third ◽  
The Law ◽  
Privity Of Contract

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas on the law curriculum. According to the doctrine of privity of contract, only the parties to the contract are bound by, or can enforce, the obligations under the contract. A person who is not a party to a contract does not have any rights under that contract and is not subject to any of its obligations (or burdens). This chapter considers the rules of contract law, and related rules, that are applicable to contracts which stipulate third party rights. It considers the relevant provisions of the Contracts (Rights of Third Parties) Act 1999, the scope of the legislative reform, the test for third party enforceability and how the doctrine of privity of contract is related to the consideration requirement. It also looks at means of circumventing the privity doctrine such as assignment, and exceptions to the privity doctrine such as agency principles as employed in The Eurymedon. The chapter then examines remedies available to the promisee which have the effect of enforcing any promise in favour of a third party beneficiary or enabling substantial damages to be recovered to cover the third party’s loss. Finally, the means by which contractual burdens may bind third parties are examined.

6. Privity

2020 ◽  
pp. 128-158
Author(s):  
Janet O’Sullivan
Keyword(s):  
Common Law ◽  
Third Parties ◽  
Third Party ◽  
The Core ◽  
The Subject ◽  
The Law ◽  
Contractual Obligations ◽  
Contractual Rights

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines the doctrine of privity in the law of contract. The doctrine of privity dictates that a person who is not a party to the contract cannot be granted contractual rights by the contract or be placed under contractual obligations by it. It explores the rationale of the principle, discusses the authorities that established it, and explores the various common law exceptions to the rule that a third party cannot acquire rights under a contract. This chapter also covers the statutory exception to privity provided in the Contracts (Rights of Third Parties) Act 1999.

11. Privity of contract and third party rights

2019 ◽  
pp. 442-482
Author(s):  
Robert Merkin ◽  
Séverine Saintier
Keyword(s):  
Contract Law ◽  
Third Parties ◽  
Third Party ◽  
Legislative Reform ◽  
The Third ◽  
The Law ◽  
Privity Of Contract

Course-focused and comprehensive, the Textbook on series provides an accessible overview of the key areas on the law curriculum. According to the doctrine of privity of contract, only the parties to the contract are bound by, or can enforce the obligations under the contract. A person who is not a party to a contract does not have any rights under that contract and is not subject to any of its obligations (or burdens). This chapter considers the rules of contract law, and related rules, that are applicable to contracts which stipulate third party rights. It considers the relevant provisions of the Contracts (Rights of Third Parties) Act 1999, the scope of the legislative reform, the test for third party enforceability and how the doctrine of privity of contract is related to the consideration requirement. It also looks at means of circumventing the privity doctrine such as assignment, and exceptions to the privity doctrine such as agency principles as employed in The Eurymedon. The chapter then examines remedies available to the promisee which have the effect of enforcing any promise in favour of a third party beneficiary or enabling substantial damages to be recovered to cover the third party’s loss. Finally, the means by which contractual burdens may bind third parties are examined.

25. Third Parties

Contract Law ◽  
2018 ◽  
Author(s):  
Ewan McKendrick
Keyword(s):  
Common Law ◽  
General Rule ◽  
Third Parties ◽  
Third Party ◽  
Freedom Of Contract ◽  
The Third ◽  
Simple Mechanism ◽  
The Individual ◽  
Privity Of Contract ◽  
The Impact

This chapter examines the impact of a contract on third parties. It addresses two main questions: whether or not a third party can acquire any rights under the contract, and whether or not the contract can impose upon him obligations or liabilities. The general rule adopted by English law is that the contract creates rights and imposes obligations only between the parties to the contract: the third party thus neither acquires rights under the contract nor is he subject to liabilities. This general rule is known as the doctrine of privity of contract. The Contracts (Rights of Third Parties) Act 1999, however, provides a relatively simple mechanism by which contracting parties can confer upon a third party a right to enforce a term of their contract. The dominant philosophy that underpins the 1999 Act is one of freedom of contract and, this being the case, the success of the Act in practice will depend upon contracting parties themselves. The chapter examines the individual sections of the 1999 Act, the exceptions to the doctrine of privity that existed at common law and under various statutes prior to the enactment of the 1999 Act. The chapter concludes by considering the extent to which a third party can be subject to an obligation by a contract to which he is not a party.

6. Privity

2018 ◽  
Author(s):  
Janet O’Sullivan
Keyword(s):  
Common Law ◽  
Third Parties ◽  
Third Party ◽  
The Core ◽  
The Subject ◽  
The Law ◽  
Contractual Obligations ◽  
Contractual Rights

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines the doctrine of privity in the law of contract. The doctrine of privity dictates that a person who is not a party to the contract cannot be granted contractual rights by the contract or be placed under contractual obligations by it. It explores the rationale of the principle, discusses the authorities that established it, and explores the various common law exceptions to the rule that a third party cannot acquire rights under a contract. This chapter also covers the statutory exception to privity provided in the Contracts (Rights of Third Parties) Act 1999.

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