Privity of Contract Rule

Study Notes

Privity of contract refers to the relationship between the parties to a contract, where only they can sue or be sued on the contract.
This means that a third party, who is not a party to the contract, cannot enforce the contract or claim any rights under it.

The privity of contract rule states that a contract cannot confer rights or impose obligations on a third party who is not a party to the contract.
This rule is based on the idea that a contract is a private agreement between the parties and should not affect others who are not part of the agreement.

Trust: A third party can enforce a contract if they are a beneficiary of a trust created by the contract.
Agency: A third party can enforce a contract if they are an agent of one of the parties to the contract.
Assignment: A third party can enforce a contract if they have been assigned the rights under the contract.
Statutory exceptions: Some statutes, such as the Contracts (Rights of Third Parties) Act 1999 in the UK, allow third parties to enforce contracts in certain circumstances.

Third party rights refer to the rights of a person who is not a party to a contract, but who may benefit from or be affected by the contract.
Third party rights can be created through various means, including:
- Express provision: The contract can include an express provision granting rights to a third party.
- Implied provision: A third party can have implied rights under the contract, even if they are not explicitly mentioned.
- Statutory provision: Statutes can create third party rights in certain circumstances.

This Act allows a third party to enforce a contract if:
- The contract expressly provides that the third party may enforce the contract.
- The contract purports to confer a benefit on the third party.
- The third party has communicated their acceptance of the contract to the promisor.
The Act applies to contracts entered into on or after May 11, 2000.

Only parties to a contract can sue or be sued on the contract, excluding third parties who are not part of the agreement.
This means that third parties cannot enforce the contract or claim any rights under it.

A contract cannot confer rights or impose obligations on a third party who is not a party to the contract.
This rule is based on the idea that a contract is a private agreement between the parties and should not affect others.

A third party can enforce a contract if they are a beneficiary of a trust created by the contract.

A third party can enforce a contract if they are an agent of one of the parties to the contract.

A third party can enforce a contract if they have been assigned the rights under the contract.

Some statutes, such as the Contracts (Rights of Third Parties) Act 1999 in the UK, allow third parties to enforce contracts in certain circumstances.

Third party rights refer to the rights of a person who is not a party to a contract, but who may benefit from or be affected by the contract.
Third party rights can be created through:
- Express provision: The contract includes an express provision granting rights to a third party.
- Implied provision: A third party can have implied rights under the contract, even if they are not explicitly mentioned.
- Statutory provision: Statutes can create third party rights in certain circumstances.

The Act allows a third party to enforce a contract if:
- The contract expressly provides that the third party may enforce the contract.
- The contract purports to confer a benefit on the third party.
- The third party has communicated their acceptance of the contract to the promisor.
The Act applies to contracts entered into on or after May 11, 2000.