17. Privity and third party rights

Abstract

This chapter describes privity of contract, explaining the development of the doctrine and the problems associated with its application. The scope and usage of the Contracts (Rights of Third Parties) Act 1999 is discussed. The tensions inherently created by the possible freedom of the contracting parties to vary or cancel a third party’s right under an agreement are highlighted. Circumventions of, and exceptions to, the doctrine are also addressed including limitations on the doctrine which may be brought about by an assignment of contractual rights and the doctrine of agency. Finally, the issues surrounding privity and the doctrine of consideration are noted.