Privity of Contract & Rights of Third Party

A contract is enforceable by law and a lawful relationship is generated under it. It creates certain rights as well as obligations between parties to the contract. This paper comparatively surveys the two limbs of the privity doctrine. To that end, the judgments of Pakistani and English courts have been analyzed to perform a critical analysis of the developed jurisprudence on the privity of contract doctrine. It reviews the traditional approach of Pakistani courts toward the non-enforcement of third-party rights. Also, it highlights the evolved English approach that gives third parties a right to enforce a contract which confers benefits on it. Then, the paper examines judge-made exceptions of the privity doctrine including cases of family settlement and trust. Furthermore, it analyzes the second limb of privity doctrine that does not permit the imposition of liability on third party, however, it highlights that in Pakistan such burden is placed on third party.