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The Long Standing General Rule Of English Law

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he government is to reform the long standing general rule of English law under which a person can only enforce a contract if he or she is a party to it. The Contracts (Rights of Third Parties) Bill is progressing through Parliament and is expected to be enacted in the summer of 1999. It will come into force six months after enactment, but it will not apply to contracts entered into before it comes into force (FirstSource, PLC, 1999, X(1), 57).
The Bill implements recommendations of the Law Commission. It will bring English law more closely into line with other systems of contract law (including New York law) by enabling persons who are not parties to a contract to enforce rights under that contract.
The new law will have significant …show more content…

English lawyers have deployed a variety of devices to overcome the privity of contract rule. These include the use of trusts, deed polls, agency arrangements and assignment and novation provisions. The need for these devices will have to be reconsidered in the light of the new law.
New third party rights
The new law will give a third party rights to enforce a contractual term if the contract expressly so provides or if the term confers a benefit on the third party. The third party must be identified (by name or as a member of a defined class) but does not have to be in existence when the contract is made. The third party then has the same rights to enforce the contract as if it were a party to the contract. This also means that third parties can rely on a contractual term excluding or limiting the third party 's liability.
These rights supplement and do not take away any rights that the third party would otherwise have under the existing law. The new law also cannot be used to impose direct obligations on third parties. However, the contract can require third parties to comply with conditions if they want to enforce the rights conferred on them.
Amendments
The contracting parties will not be able to amend the contract to vary the third party 's rights without the third party 's consent, once those rights have crystallised. This will normally be when the third party communicates its assent to the contract or the relevant contracting

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