The second rule of the Doctrine of Privity, that a third party could not enforce a contract for which he had not provided consideration, had been widely criticised by lawyers, academics and members of the judiciary.
The second rule of privity, that a third party cannot claim benefits from a contract, was widely criticised by academics, members of the judiciary and legal professionals.
However, the imperfection inherent in sales contracts and their guarantees, the continuing unequal bargaining and evaluative power between buyers and sellers (especially where there is a lack of contract privity), and the ability of sellers to waive such warranties raised serious reservations about the adequacy of the contractual theory, especially as to product safety.
Privity is a doctrine in English contract law that covers the relationship between parties to a contract and other parties or agents.
It has been argued that privity is not even a distinct doctrine, but rather simply part of consideration.
Because this normally involves parties who are not part of the main contract, it has been used as a way around the doctrine of privity.
This is because the counterclaim may be more valuable than the original claim, which would impose an obligation on the third party to pay the promisor money, something not appropriate under the doctrine of privity which prohibits the placing of a burden or obligation on a third party.
Trusts have been used as a way around the original doctrine of privity.
In the second type of arrangement, the contractual instruction has a limited value in the sense that the privity of contract rules out the possibility of third party protection - unless explicitly arranged.
The Court of Appeal under Lord Denning tried to use this as an opportunity to claim that the doctrine of privity was invalid, something the House of Lords rejected.
