CHAR_A01.PDF, page 1-18 @ Normalize ( CHAR_A01.QXD )

The relevant sections of the act read as follows:

1 (1) Subject to the provisions of the Act, a person who is not a party

to a contract (a ‘third party’) may in his own right enforce a term of

the contract if:

(a) the contract expressly provides that he may, or

(b) subject to subsection (2), the term purports to confer a benefit on him.

(2) Subsection (1)(b) does not apply if on a proper construction of the

contract it appears that the parties did not intend the term to be

enforceable by the third party.

(3) The third party must be expressly identified in the contract by

name, as a member of a class or as answering a particular description

but need not be in existence when the contract is entered into.

So the Act allows a third party to enforce a benefit, but lays down the
following conditions:

• The contract must either actually say that the benefit is intended for this
  person, or it must be clear that this is what the contract meant (it
  ‘purports’ to confer a benefit).


• The parties must have intended the benefit to be enforceable by the third
  party.


• The third party must be identified in the contract by name, or
  description, or as a member of a group.

The Contracts (Rights of Third Parties) Act 1999 has certainly brought about
the changes recommended by many, including the Law Commission, over a

142 Contract law

So what is left of privity? Would it have been better to simply abolish the

doctrine?

The management

will take no

responsibility

whatsoever for

damage to clients’

property, however

caused

Any damage to

customers’

property will be

limited to the

replacement value

or £15, whichever

is the lower

An exclusion clause A limitation clause

The Contracts (Rights

of Third Parties) Act

1999

_________________

_________________

_________________

_________________

How does this

Act change the

rule of privity?