Privity of contract
Contract Law

The doctrine of privity of contract is the relationship that exists between parties to a contract. Only those parties to the contract are bound by it and are able to enforce the contractual obligations under the contract.

As it stands, privity of contact is still an integral part of the principles which govern the law of contract. In recent years, the strictness of the principle has been alleviated by the Contracts (Rights of Third Parties) Act 1999.  Contracts (Third Party Rights) Act 1999 has relaxed the operation of the doctrine so that a person or class of persons are able to enforce a contract without being a party to it where the contract confers a benefit on them; alternately, the contract may expressly provide for the benefit of third parties. The effect of this Act is usually excluded in commercial contracts.

The principle that a person can not enforce obligations under a contract to which he is not a party to was established in the case of Tweedle v Atkinson (1861) where A promised B that he would pay a sum of money to B’s son, C upon his marriage to A’s daughter. It was held that C could not enforce the promise made by A to B to pay him, as he was not a party to the contract. This was re-affirmed in the case of Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915) where Viscount Haldane LC stated that “ … in the Law of England certain principles are fundamental. One is that only a person who is a party to a contract can sue on it”. The leading modern authority is Beswick v Beswick (1968).