Which statement correctly reflects privity under modern law?

• A. The Contracts (Rights of Third Parties) Act 1999 allows some third parties to enforce where the contract confers a benefit or intends to confer one.
• B. Third parties have rights to enforce all contracts unconditionally.
• C. Privity has been unchanged since its origin.
• D. Third parties can only enforce contracts if they are trustees.

Answer: (C)

The key idea is that privity has been reformed by the Contracts (Rights of Third Parties) Act 1999. Under modern law, a third party can enforce a contract even though they are not a party to it, but only in specific situations: when the contract expressly provides that a third party may enforce it, or when the contract purports to confer a benefit on the third party. The third party must be identified in the contract, either by name or as a member of a defined class, or be ascertainable by the terms of the contract. This creates a limited right for certain third parties to sue for breach, even though they did not sign the contract themselves.

This contrasts with the old idea that privity of contract means only those who are party to the contract can sue on it. The statement that privity has been unchanged is therefore not accurate. The other suggestions are also off the mark: third parties do not have rights to enforce all contracts unconditionally—rights arise only when the Act applies. And there is no general rule that third-party enforcement is limited to trustees.