THE IMPACT OF NEIGHBOUR PRINCIPLE ON THE DOCTRINE OF PRIVITY OF CONTRACT

Though prior to the formulation of the neighbour principle there were (and still arc) known areas of overlap between contract and torts that have not led to any threatened or actual exclusion of the application (wholly or partly) of one or the other principles of both laws. Rather, the overlap offer their litigants the opportunity of choosing under which of the laws to institute his case in a court or to make alternative claim in the pleading so that if the facts of the case do not for instance, establish a claim under contract, it may do so in tort. But with the formulation of the neighbour principle under the tort of negligence, a new but life threatening area of inter-course came into existence between them. This area is known as the rights of third parties under an agreement. Under the doctrine of privity of contract, third parties cannot sue in their own rights to enforce benefits accruing to them under a contract. However, under the neighbour principle, it is possible for third parties to a contract to sue for the enforcement of benefits accruing to them there under provided they can prove that the non-realization of the rights or benefits is as a result of the non-exercise of care on the part of the party sued. The stand of these two important principles of both laws (i.e. contract and tort) has clearly put them in a conflictual situation. And since it is the neighbour principle that allows direct enforcement of third parties rights, it is unarguable that it is the one that would threaten the existence of the doctrine of privity of contract. The nature and extent of the impact however, is what one would like to know. That, therefore, is the major task of this paper. But before discussing that, the paper will first discuss separately and briefly the nature of privity of contract and the neighbour principle.