PRIVITY OF CONTRACT 1

Topic of the day

- The doctrine of privity of contract

- The two aspects of the doctrine of privity

- The strength and weakness of the doctrine of privity

THE DOCTRINE OF PRIVITY OF CONTRACT

The privity principle in contract law stipulates that only parties directly involved in a contract enjoy legal rights and obligations. This means that third parties who were not part of the original agreement often lack enforceable rights. See the case of Tweddle v Atkinson in the UK and the Contracts (Rights of Third Parties) Act 1999, which have influenced and modified this principle, allowing certain exceptions and extending third parties rights in specific circumstances.

THE TWO ASPECTS OF THE DOCTRINE OF PRIVITY

The principle of privity in contract law is rooted in the idea that only contracting parties have enforceable rights and obligations, and has been modified through cases and legislation. The case of Tweddle v Atkinson which highlighted the strict application of reciprocity and Dunlop Pneumatic Tire Co Ltd v Selfridge & Co Ltd is another case which highlighted the importance of direct contractual links. However, provisions such as the UK Contracts (Rights of Third Parties) Act 1999 have introduced exceptions to allow third parties to enforce certain contractual terms under certain conditions, thereby changing the traditional principles of privity.

THE STRENGTH AND WEAKNESS OF THE DOCTRINE OF PRIVITY

The principle of privity in contract law has its advantages and disadvantages. Its strength lies in upholding the principle that only contracting parties have enforceable rights, ensuring clarity and predictability as seen in the case of Tweddle v Atkinson which highlight the strict application of this principle to safeguard the integrity of the contract.

  However, weaknesses can arise where legitimate interests of third parties are ignored. This restriction led to the introduction of the Contracts (Rights of Third Parties) Act 1999 in the UK, which was designed to address this shortcoming. The Act reduces the rigidity of the principle and enhances fairness by allowing certain third parties to enforce the terms of a contract. Despite its efforts at balance, the principle's weakness remains in limiting the scope of parties who can enforce their contractual rights.