Position before the Act

After making detailed research the library, these are my findings of the current law in

UK. Previously, the law in UK was that that if a person is not a party for a contract he does not

have any rights or obligations under it. He is said to be a “stranger” or “third party” to the

contract. Only person who are parties to a contract can sue and be sued on the contract. The

doctrine of privity caused hardship, particularly to those who are entitled to some benefit under a

contract but not a party. Lord Denning called the concept of privity as “commercially

inconvenient and fundamentally unjust”.

Because of that, now in UK, they have Contracts (Rights of Third Parties) Act 1999. It is

an Act of the Parliament of the United Kingdom that significantly reformed the common

law Doctrine of Privity. The act was jokingly offered to Lord Denning as a birthday present due

to his fight to overturn the doctrine of privity. The Act is said to have “…. removed one of the

most universally disliked and criticised blots on the legal landscape.” The English Parliament

had enacted the Contracts (Right of Third Parties) Act 1999 which allows third parties to enforce

a contract if the contract expressly stated so or purports to benefits the third party. The Act

introduces English law a limited third party right of action.