Introduction

Doctrine of Privity was established as early as 1861 in the Tweedle v Atkinson case, consisted of two rules: (1) a third party may not have obligations imposed by the terms of a contract; (2) a third party may not benefit from the terms of a contract. The second rule is criticized by scholars and law practitioners for its inability to allow a third party (TP) enforce a contract for his/her favor intended by the contracting parties (CP). And hence, in 1999, the Contracts (Rights of Third Parties) Act 1999 (The Act) came into force in United Kingdom, to reform the doctrine. In my opinion, the Act does simplify and mend the problem caused by the Doctrine of Privity but still has its limitation.

Discussion: The Act as a simple mechanism

Avoiding Inconsistency: inconvenience in commercial life and other legal actions

By acknowledging right of TPs have in contracts, where benefit is intended to confer on them, The Act helped to limit inconsistency in cases. For example, in Bourne v Mason, TP was allowed to enforce promise in contract, contradicting to Price v. Easton, where plaintiff could not recover. In these cases, even reasoning varied in judgments. Such inconvenience greatly affects the commercial life. Barrister and Law professor Stephen Guest criticized that "…it undermines the social interest of the community in the security of bargains and it is commercially inconvenient" .

However, now, in The Act, Section 1 (1) & (4) stated TP can sue for subjects that