“At common law privity prevented a third party from ever receiving an enforceable benefit from a contract made between other parties. This situation has been clearly and decisively remedied by the Contracts (Rights of Third Parties) Act 1999. No longer will third parties be denied the ability to enforce benefits conferred upon them by a contract between two or more other parties. Discuss.”

This essay takes a look at the principle of privity in contract law, examines the exceptions to the rule of privity which have been developed by the courts and clarifies how the Contract (Rights of Third Parties)Act 1999 has changed the rule in order to allow third parties enforce rights to a contract between two or more other people. The basic doctrine of privity has been criticised in a number of cases, as Lord Steyn commented in one case: There is no doctrinal, logical or policy reason why the law should deny effectiveness to a contract for the benefit of a third party where that is the expressed intention of the parties. These arguments led to the reform of the privity rule and this essay aims to clarify whether this reform has improved the general rule.

The common law doctrine of privity means that a contract cannot, generally, confer rights or impose obligations ari…(short extract)