The doctrine of privity of contract broadly provides that a contract should
neither benefit nor burden parties external to the contract. This thesis can be
divided into two parts: the first on privity itself, and the second on its
exceptions.
The first part contains a historical analysis of the development of privity,
leading to the provision of a definition of privity in modern Scots law. It also
examines whether privity is compatible with the leading theories of Scots
contract law (will theory, promissory theory, and assumption theory) and
considers the relationship between privity and third party rights. The
interaction between privity and delict has proved controversial in various
situations involving third-party loss. Accordingly, this part analyses the
intersection between privity and delictual liability. The first part also identifies
and assesses the policy considerations that have justified statutory
exceptions to privity. It concludes with discussion on whether privity does and
should continue to exist in Scots law.
The second part provides a taxonomy of concepts which operate where:
1. There is an extra-contractual party
2. Which has suffered loss caused by non-performance or defective
performance of a contract
3. And it lacks a contractual right to recover its losses
4. And the concept provides a means of recovery for the extra-contractual
party, and/ or a means by which the contracting party
which did not cause the loss can recover on behalf of the extra-contractual
party.
The four relevant concepts are: contracts for the benefit of another;
transferred loss; ad hoc agency; and undisclosed agency. The thesis
analyses each concept in turn, examining its relationship with privity, contract
theory, and delictual liability. Policy considerations supporting each exception
are identified and assessed. The conclusions of the thesis address whether
these concepts can be recognised as justifiable exceptions to privity. The
question of whether external network liability should be recognised as a new
exception to privity is also considered.
Whilst the thesis focuses on Scots law, comparative reference is made
throughout to English law. This is because the development of contracts for
the benefit of another, transferred loss, and undisclosed agency is closely
intertwined in the two jurisdictions
