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Chapter

This chapter considers two principal questions: firstly, may a person who is not a party to a contract acquire rights under it? Secondly, can a contract impose duties on a person who is not a party to it? With some exceptions, the common law answered ‘No’ to both. A contract between A and B cannot be enforced by a third party, C, even if the contract is for the benefit of C. Nor can a contract between A and B impose burdens on C. Following the Contracts (Rights of Third Parties) Act 1999 there is now a statutory exception to the principle that C acquires no rights under a contract between A and B. Under this Act, a third party might be able to enforce a term of the contract if the contract expressly provides that they may, or if the relevant term purports to confer a benefit on them.

Chapter

This chapter considers two principal questions: firstly, may a person who is not a party to a contract acquire rights under it? Secondly, can a contract impose duties on a person who is not a party to it? With some exceptions, the common law answered ‘No’ to both. A contract between A and B cannot be enforced by a third party, C, even if the contract is for the benefit of C. Nor can a contract between A and B impose burdens on C. Following the Contracts (Rights of Third Parties) Act 1999 there is now a statutory exception to the principle that C acquires no rights under a contract between A and B. Under this Act, a third party might be able to enforce a term of the contract if the contract expressly provides that he may, or if the relevant term purports to confer a benefit on him.

Chapter

18. Privity and third parties  

Protecting the rights of non-parties

This chapter examines how English law, through a doctrine known as privity of contract, deals with the problem posed by contracts whose performance involves third parties. According to the doctrine of privity, a contract ordinarily only affects persons who are party to it. Third parties are neither bound by the contract nor entitled to claim rights under the contract. However, the courts and Parliament developed a number of exceptions to the strict rule of privity, each of which gives third parties a right to sue under the contract in a certain type of situation. For example, the Contracts (Rights of Third Parties) Act 1999 gives third party beneficiaries a right to enforce contract terms. This chapter first considers the problem of third party rights in contracting before discussing the effects of privity and the provisions of the Contracts (Rights of Third Parties) Act 1999 in more detail.

Chapter

Jack Beatson, Andrew Burrows, and John Cartwright

Agency is the relationship that exists where one person (the principal) authorizes another (the agent) to act on its behalf and the agent agrees to do so. This Chapter discusses the modes of agency creation and the different kinds of agency, and the effect of agency: (a) the relations between the principal and third parties; and (b) the relations between the agent and third parties.

Chapter

18. Privity and third parties  

Protecting the rights of non-parties

This chapter examines how English law, through a doctrine known as privity of contract, deals with the problem posed by contracts whose performance involves third parties. According to the doctrine of privity, a contract ordinarily only affects persons who are party to it. Third parties are neither bound by the contract nor entitled to claim rights under the contract. However, the courts and Parliament developed a number of exceptions to the strict rule of privity, each of which gives third parties a right to sue under the contract in a certain type of situation. For example, the Contracts (Rights of Third Parties) Act 1999 gives third party beneficiaries a right to enforce contract terms. This chapter first considers the problem of third party rights in contracting before discussing the effects of privity and the provisions of the Contracts (Rights of Third Parties) Act 1999 in more detail.

Chapter

In recent times, there has been considerable development with respect to determining how rights in land can be created and the implications of such rights for purchasers of land. Licences are not considered full proprietary rights but provide an interesting area where the law seeks to protect licensees from both the licensor and, in some cases, the purchaser. It is an area of law where the courts have had to deal with informal relationships and try to balance the conflicting pressures of the satisfaction of legitimate expectations with the desire for security of transactions. This chapter focuses on licences: it first considers the nature of licences before turning to contractual licences and the licensee’s rights, and contractual licences and third parties.

Chapter

Paul S Davies and Graham Virgo

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter focuses its discussion on personal claims, where the claimant seeks a sum of money from the defendant but does not assert any right to any particular property. However, even where the defendant is solvent and could satisfy a personal claim, a proprietary claim might often be more desirable. If the property has risen in value, then that uplift in value will necessarily benefit the claimant if the claim is proprietary, but not if the claim is personal. A personal claim for the value of the property at the time of the third party’s wrong might be preferred where the property has fallen in value. Moreover, a personal claim will be the only possible type of claim available to the claimant if the property in question has been dissipated and no longer exists. In such circumstances, a proprietary claim is impossible and a personal claim alone can be pursued.

Chapter

Can a contract alter the rights and liabilities of a third party who is not privy to the contract? This chapter addresses the following questions: (1) Why is the general rule that only contract parties can sue on a contract? (2) What rights of enforcement does the Contract (Rights of Third Parties) Act 1999 confer on a third party? (3) What is the impact of the 1999 Act on the requirement that a contract claimant must have given consideration? (4) To what extent can a promisee enforce a contract for the benefit of a third party? (5) Aside from the 1999 Act, what legal avenues exist for third parties to enforce promises made for their benefit? (6) When and how does a contract bind third parties?

Chapter

A contract alters the rights and liabilities of the contract parties: they are said to be privy to the contract. But what about someone who is not a contract party (a ‘third party’)? This chapter addresses the following questions: (1) What are the justifications for the general rule that only contract parties can sue on a contract? (2) What rights of enforcement does the Contract (Rights of Third Parties) Act 1999 confer on a third party? (3) What is the impact of the 1999 Act on the requirement that a contract claimant must have given consideration? (4) To what extent can a promisee enforce a contract for the benefit of a third party? (5) Aside from the Contract (Rights of Third Parties) Act 1999, what legal avenues exist for third parties to enforce promises made for their benefit? (6) When and how does a contract bind third parties?

Chapter

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. This chapter examines the privity rule, which states that only a party to the contract can sue upon it. It discusses the development of the privity rule, distinguishing the privity rule from the consideration rule, evading the privity rule, techniques for giving a right directly to a third party or apparent third party, specific performance in favour of a third party and damages for a third party’s loss, and the Contracts (Rights of Third Parties) Act 1999.

Chapter

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. This chapter examines the privity rule, which states that only a party to the contract can sue upon it. It discusses the development of the privity rule, distinguishing the privity rule from the consideration rule, evading the privity rule, techniques for giving a right directly to a third party or apparent third party, specific performance in favour of a third party and damages for a third party’s loss, and the Contracts (Rights of Third Parties) Act 1999.

Chapter

This chapter examines the impact of a contract on third parties. It addresses two main questions: whether or not a third party can acquire any rights under the contract, and whether or not the contract can impose upon him obligations or liabilities. The general rule adopted by English law is that the contract creates rights and imposes obligations only between the parties to the contract: the third party thus neither acquires rights under the contract nor is he subject to liabilities. This general rule is known as the doctrine of privity of contract. The Contracts (Rights of Third Parties) Act 1999, however, provides a relatively simple mechanism by which contracting parties can confer upon a third party a right to enforce a term of their contract. The dominant philosophy that underpins the 1999 Act is one of freedom of contract and, this being the case, the success of the Act in practice will depend upon contracting parties themselves. The chapter examines the individual sections of the 1999 Act, the exceptions to the doctrine of privity that existed at common law and under various statutes prior to the enactment of the 1999 Act. The chapter concludes by considering the extent to which a third party can be subject to an obligation by a contract to which he is not a party.

Chapter

This chapter examines the impact of a contract on third parties. It addresses two main questions: whether or not a third party can acquire any rights under the contract, and whether or not the contract can impose upon him obligations or liabilities. The general rule adopted by English law is that the contract creates rights and imposes obligations only between the parties to the contract: the third party thus neither acquires rights under the contract nor is he subject to liabilities. This general rule is known as the doctrine of privity of contract. The Contracts (Rights of Third Parties) Act 1999, however, provides a relatively simple mechanism by which contracting parties can confer upon a third party a right to enforce a term of their contract. The dominant philosophy that underpins the 1999 Act is one of freedom of contract and, this being the case, the success of the Act in practice will depend upon contracting parties themselves. The chapter examines the individual sections of the 1999 Act, the exceptions to the doctrine of privity that existed at common law and under various statutes prior to the enactment of the 1999 Act. The chapter concludes by considering the extent to which a third party can be subject to an obligation by a contract to which he is not a party.

Chapter

Robert Merkin and Séverine Saintier

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines privity of contract, its relationship with consideration, and the ability of third parties to enforce contractual provisions for their benefit. The doctrine of privity of contract provides that the benefits of a contract can be enjoyed only by the parties to that contract and only parties can suffer the burdens of the contract. At common law, third party beneficiaries could not enforce a contractual provision in their favour so various devices were employed seeking to avoid privity. Statute now allows for direct third party enforcement but in limited circumstances. This chapter examines the background to privity and the attempted statutory reform in the Contracts (Rights of Third Parties) Act 1999 as it has been interpreted in the case law. The chapter also discusses the common law means of avoiding privity as illustrated by the case law, e.g. agency, collateral contracts, and trusts of contractual obligations. Finally it assesses the remedies available to the contracting party to recover on behalf of the third party beneficiary of the promise, including the narrow and broad grounds in Linden Gardens Trust. It concludes by briefly considering privity and burdens—and the exceptional situations where a burden can be imposed on a person who is not a party to the contract.

Chapter

This chapter discusses the rules for additional claims under Part 20 of the Civil Procedure Rules 1998 (CPR). An additional claim typically will seek to pass any liability established against the defendant to a third party. This is achieved by seeking indemnities, contributions, or related remedies against the third party. A third party may in turn seek to pass on its liability to a fourth party, and so on. Permission to issue an additional claim is not required if the additional claim is issued before or at the same time as the defendant files its defence. An additional claim operates as a separate claim within the original claim.

Chapter

This chapter discusses the rules for additional claims under Part 20 of the Civil Procedure Rules 1998 (CPR). An additional claim typically will seek to pass any liability established against the defendant to a third party. This is achieved by seeking indemnities, contributions, or related remedies against the third party. A third party may in turn seek to pass on its liability to a fourth party, and so on. Permission to issue an additional claim is not required if the additional claim is issued before or at the same time as the defendant files its defence. An additional claim operates as a separate claim within the original claim.

Chapter

Celebrated for their conceptual clarity, titles in the Clarendon Law Series offer concise, accessible overviews of major fields of law and legal thought. A mortgage is what is given in exchange for the loan. It is a property right, given to the building society or other lender, which makes the house owner liable and available to pay a loan used for the purchase of land. There are different kinds of mortgage, depending upon their purpose and the way they are repaid. These include acquisition mortgage, post-acquisition mortgage, repayment mortgage, and interest-only mortgage. This chapter discusses the mechanics of mortgages; rights, remedies, and protections in the mortgage relationship; third parties and the protection of mortgagees; and joint mortgagors and the problem of pressure.

Chapter

This chapter considers the process of tracing. Tracing describes the process by which the law allows the original owner of property to identify and claim as his or her assets in the hands of a third party. Since tracing and following are proprietary concepts, they can only be used if there was initially, and there remains (in its original or any substituted form), an asset or a property to which claim can be made. Tracing is resorted to most frequently when the trustee is insolvent, so that a personal claim is of limited value. It is easy to forget that in most, if not all, cases of tracing or following, the trustee will have acted in breach of trust and will personally be liable.

Chapter

This chapter discusses the scope of the Civil Partnership Act 2004 (CPA 2004) which came into force on 5 December 2005 and the formation of civil partnerships. It outlines civil partnership and same-sex marriage under The Marriage (Same-Sex Couples) Act 2013. It also explains the differences between civil partnership and marriage. The CPA 2004 enables same-sex couples to form legally recognized civil partnerships. Once a partnership has been formed, civil partners assume many legal rights and responsibilities for each other, third parties, and the State. It does explain that adultery, however, is not a fact to establish the ground for dissolution of a civil partnership as it is in marriage.

Chapter

This chapter discusses the scope of the Civil Partnership Act 2004 (CPA 2004) which came into force on 5 December 2005 and the formation of civil partnerships. It outlines civil partnership and same-sex marriage under The Marriage (Same-Sex Couples) Act 2013. It also explains the differences between civil partnership and marriage. Once a partnership has been formed, civil partners assume many legal rights and responsibilities for each other, third parties, and the State. It does explain that adultery, however, is not a fact to establish the ground for dissolution of a civil partnership as it is in marriage. The Civil Partnership (Opposite-sex Couples) Regulations 2019 are also outlined.