Third party rights—the common law doctrine of privity of contract

Published by a UU��ֱ�� Dispute Resolution expert

Practice notes

In-house

Third party rights—the common law doctrine of privity of contract

Published by a UU��ֱ�� Dispute Resolution expert

Practice notes

In-house

This Practice Note discusses the Common law doctrine of Privity of Contract; the equitable and statutory exceptions to it; how the doctrine affects enforcing a contract against a third party and what happens when, notwithstanding the lack of Privity, a contract has an indirect effect on a third party. For guidance on contracts and third parties more generally and on the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999), respectively, see Practice Notes:

•
Contracts and third party rights
•
Third party rights—the Contracts (Rights of Third Parties) Act 1999

What does privity of contract mean?

'Privity of contract' is a common law doctrine, which provides that you cannot either:

•
enforce the benefit of, or
•
be liable for any obligation under

a contract to which you are not a party.

Therefore, at common law, if your client is not a party to a contract (ie they are a third party) then they cannot sue or be sued under that contract.

Example:

A promises

Jurisdiction(s):

United Kingdom

Key definition:

Common law definition

What does Common law mean?

Common law is case law (decisions from courts and tribunals). Case law has also established and developed many principles of law and equity not covered by legislation. Case law is therefore a key source of primary law.

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