Order Description;

To answer the following questions in the form of essay
1. What is the law of privity?
2. Why has it undergone “reform”?
3. How useful is the law of privity to modern contracts?

Answer;

Introduction

Taking trade and business in general to be a building, then its foundation upon which the stability emanates would be contracts. In day-to-day life, people make many promises, which in turn influence many decisions (Trebilcock, 2007). These decisions have many implications to the promisor and to the one being promised. A contract is hence that factor that binds parties in trade together and ensures the law protects the parties involved.

The law of privities, on the other hand, describes the relationship that is there between the parties engaged in a contract. The doctrine of privity of contract provides that a contract only create liabilities and obligations only between the parties to the contract (Kenna & Associates, 2014), (Gillies, 2004). This means that the contract, therefore, can only be enforced against and by the parties to the contract alone and not by third parties. This law deprives third parties to claim for their benefits that are accrued by existence of the contract. This is so because a third party is tied-up by the law when trying to enforce a contract that results to them suffering a loss because of a breach of the contract (Koffman & Macdonald, 2010). The case of Tweddle v Atkinson (1861) is a perfect example (Beatson, 1998). William’s father and his father in law entered into a contract where they would make payment of £200.00 to William. His father honored the contract, but his father in law died before he could make the payments. William sued but his claims were rejected because he was not a party to the contract. This is the height of injustice that the doctrine of privity held (Davies, 2005).

The law of privity had to undergo reforms. This was deemed necessary because of the injustices it presented to people. It completely blocked third parties who are seriously affected by the enforcement or breach of the contract from making claims. The case of Tweddle v Atkinson (1861) is a perfect example where William was the beneficiary, but since he was a third party to the contract, his claims were dishonored. It also had to undergo reforms to ensure that parties to a contract do not deliberately breach it (Palmer, 1989), (Stone & Devenney, 2013). In some cases, parties to a contract would breach it because only the third parties were negatively affected.

The law of privity is, however, not very bad. It remains relevant to-date in law of contract even after the necessary reforms were done. Its relevance emanates from the fact that the law is a guide on how to solve disputes. WheK81215099_Law of Privity it comes to trade, many people would want to reap where they never sowed. In such cases, the law of privity comes out strong in defining who should in case of a breach of the contract (Andrews, 1997). Today, when this law is put in use, a certain degree of flexibility of law is applied. A case in point is where the 1999 act is excluded when making a ruling. This prevents a third party from directly enforcing the contract. The 1999 act also provides for the non-application of privity of contract rule in cases where a third party is a beneficiary to the contract (Palmer, 1992). This ensures that the case of Tweddle v Atkinson (1861) does happen again.

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