OCR A2 Law - The Law of Contract - Privity (5)

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  • Created by: Majid
  • Created on: 26-04-13 22:40

Privity (5)

AO2: There are too many exceptions, which can over complicate the law and make it seem messy and unorganised. The Common Law rule is harsh and unfair as it allows people to break their promises ... the judges called for a reform and as a result of this the Law Commission put the proposal forward ... The Contracts (Rights of 3rd Parties Act 1999) was formed.

There are various sections in the Act, but there are 2 main sections which are of grave importance.

Section 1 (S1) states if a party is named or confers a benefit, then they can enforce their rights. If a party had a right under S1 then they also have a right under Section 2 (S2). This section states a 3rd party can't vary or recind the contract.

AO2: This means that 3rd parties are given more rights than before ... some of the exceptions aren't needed anymore such as Equity. This Act has helped simplify the law a lot and businesses might want to put clauses in their contracts by excluding the rule it will have no effect as it hasn't expressly stated the provisions.

Final AO2: ... The privity rule is still needed alongside the exceptions as the Act won't have any impact on them e.g. restrictive covenants, so it must be used in conjunction with each other, however cases nowadays should be encouraged to use the Act due to its simplification.

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