Privity of Contract: The Impact of the Contracts (Right of Third Parties) Act 1999

Author(s):  
Ewan McKendrick

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.


Contract Law ◽  
2020 ◽  
pp. 929-1012
Author(s):  
Ewan McKendrick

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.


Author(s):  
Sheng-Lin JAN

This chapter discusses the position of third party beneficiaries in Taiwan law where the principle of privity of contract is well established. Article 269 of the Taiwan Civil Code confers a right on the third party to sue for performance as long as the parties have at least impliedly agreed. This should be distinguished from a ‘spurious contract’ for the benefit of third parties where there is no agreement to permit the third party to claim. Both the aggrieved party and the third party beneficiary can sue on the contract, but only for its own loss. The debtor can only set off on a counterclaim arising from its legal relationship with the third party. Where the third party coerces the debtor into the contract, the contract can be avoided, but where the third party induces the debtor to contract with the creditor by misrepresentation, the debtor can only avoid the contract if the creditor knows or ought to have known of the misrepresentation.


2018 ◽  
Vol 26 (4) ◽  
pp. 639-648 ◽  
Author(s):  
Aisosa Jennifer Isokpan ◽  
Ebenezer Durojaye

This case note focuses on the justiciability as well as the impact of corruption on the realisation of the right to basic education. Through an assessment of the decision of the ECOWAS Court in SERAP v. Nigeria, it emphasises the role of states in ensuring that corrupt activities of government officials or third parties do not affect the enjoyment of the right. It equally emphasises the role of the Nigerian courts in ensuring a justiciable right to education.


Author(s):  
Fumiko Satoh

Companies around the world are increasingly expected to report their greenhouse gas emissions. Currently there are various formulas to calculate emissions, and there are different reporting formats. Most of the reporting formats are paper-based or non-readable-by-machine formats. The emissions of companies will influence their accounting results due to ‘cap & trade’ systems or environmental taxes. Analyses of financial impacts are important for management decisions and corporate evaluations by interested third parties. A standardized reporting format for GHG (greenhouse gas) emissions is critical for reliable analysis of the impact of emissions on finances. This paper proposes an XBRL (eXtensible Business Markup Language) format as the foundation for standardizing the emissions reporting formats, and provides a preliminary XBRL taxonomy for emissions reporting. XBRL makes it possible to combine the financial reports and the emissions reports. Evaluations of the emissions impact are easier for both managers of the company and external parties, even if a large number of emissions reports must be analyzed.


2021 ◽  
pp. 72-96
Author(s):  
Jill Poole ◽  
James Devenney ◽  
Adam Shaw-Mellors

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the doctrine of privity and third party rights. The doctrine of privity of contract provides that a person who is not a party to a contract (called a ‘third party’), cannot acquire rights under or enforce the provisions of that contract or rely on its protections even if the provisions were intended to benefit that third party. At common law there are complex, and sometimes artificial, ways to avoid this conclusion. More significant nowadays is the attempt to reform this principle by legislation in the Contracts (Rights of Third Parties) Act 1999, allowing some third party beneficiaries to enforce the provisions of contracts.


2021 ◽  
pp. 307-358
Author(s):  
Robert Merkin ◽  
Séverine Saintier

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.


Author(s):  
M P Furmston

This chapter discusses the law on contracting through agents. It covers the place of agency in English law; the formation of agency; the position of principal and agent with regard to third parties; unauthorized acts of the agent; and termination of agency.


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