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Poole's Textbook on Contract Law

Poole's Textbook on Contract Law (15th edn)

Robert Merkin QC and Séverine Saintier
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date: 12 July 2024

p. 2727. Privity of contract and third party rightslocked

p. 2727. Privity of contract and third party rightslocked

  • Robert Merkin, Robert MerkinProfessor of Commercial Universities of Reading and Exeter
  • Séverine SaintierSéverine SaintierAssociate Professor in Commercial Law Exeter Law School, University of Exeter
  •  and Jill PooleJill Poole50th Anniversary Professor of Commercial Law and Head of Aston Law Deputy Dean, Aston Business School, Aston University

Abstract

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas on the law curriculum. According to the doctrine of privity of contract, only the parties to the contract are bound by, or can enforce, the obligations under the contract. A person who is not a party to a contract does not have any rights under that contract and is not subject to any of its obligations (or burdens). This chapter considers the rules of contract law, and related rules, that are applicable to contracts which stipulate third party rights. It considers the relevant provisions of the Contracts (Rights of Third Parties) Act 1999, the scope of the legislative reform, the test for third party enforceability and how the doctrine of privity of contract is related to the consideration requirement. It also looks at means of circumventing the privity doctrine such as assignment, and exceptions to the privity doctrine such as agency principles as employed in The Eurymedon. The chapter then examines remedies available to the promisee which have the effect of enforcing any promise in favour of a third party beneficiary or enabling substantial damages to be recovered to cover the third party’s loss. Finally, the means by which contractual burdens may bind third parties are examined.

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