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Has the Contracts (Rights of Third Parties) Act 1999 gone far enough in reforming the English law of privacy?

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  1. The 1999 Act: The creation of a wide-ranging exception to the doctrine of privacy.
    1. The doctrine of privacy: Rationale and arguments for reform.
    2. The scope of the 1999 Act: Under what conditions can third parties obtain a right to enforce contracts?
  2. An incomplete reform: The limits of the 1999 Act.
    1. Exclusions and limitations: The cases not covered by the act.
    2. The 1999 Act and the pre-existing exceptions to the privacy rule: the effect of the Act on judicial development.
  3. Conclusion.

Under the doctrine of privacy, which became entrenched in English law in the latter half of the 19th century , contractual rights and liabilities are limited to the parties to the contract. The mounting criticisms and arguments for reform have led to the Contracts (Rights of Third Parties) Act 1999 , an important statute which modernises the law of contract and diminishes the relevance of complex case law dealing with the rule of privacy and its exceptions. However, while the Act has introduced a substantial exception to the privacy rule, it has left the rule intact for cases not covered by the Act . Therefore, for a number of cases, third party claims will still have to be based on pre-existing statutory and common law exceptions. This essay shall examine the problems caused by the privacy rule and the impetus for reform; it shall set out the circumstances in which third parties may or may not rely on the Act; finally, it shall analyse the incomplete nature of the Act in the context of the reform of the rule of privacy.

[...] Stone, The Modern Law of Contract, 6th edition (London: Cavendish Publishing, 2005), p.128; Law Commission Report No For example, s Married Women's Property Act 1882 on life insurance; s. 148(7) Road Traffic Act 1988 on motor insurance; s Third Parties (Rights Against Insurers) Act 1930 on third parties' rights against insurers; Bills of Exchange Act 1882 on bills of exchange and negotiable instruments generally; s. 56(1) Law of Property Act 1925 on land interests; s Companies Act 1985. See Law Commission Report No 2.52 - Whereby a promise is made in a separate contract with the promisor. [...]


[...] Furmston, Cheshire, Fifoot & Furmston's Law of Contract, p and R. Stone, The Modern Law of Contract, p M. Furmston, Cheshire, Fifoot & Furmston's Law of Contract, p If the act applies the third party is allowed under s1 to enforce a term of the contract in just the same way as a party to the contract. J. Beatson, Ansons' Law of Contract, 28th edition (Oxford: Oxford University Press, 2002), p G.H. Treitel, The Law of Contract, 11th edition (London: Sweet & Maxwell, 2003), p J. [...]


[...] However, on more general terms, it should be noted that the 1999 Act reflects the different approach of common law jurisdictions and civil law jurisdictions towards codification of the law: as stated by Beatson, whereas the code represents the ?default? principle in civil law systems, common law principles are the ?default? rules in common law jurisdictions[32]. As opposed to defining general principles covering all situations, it seems that statutes can in the common law approach take the form of statutory exceptions to common law doctrines, or a ?skeletal?[33] form, which do not necessarily cover all situations. The 1999 Act has perhaps not gone far enough in reforming the doctrine of privacy and has left a significant role for the common law. This can certainly seem problematic in terms of legal coherence and certainty. [...]

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