Benefit From A Third Party's Rights In The Contract

There are two different doctrines in conflict in the modern contract legislation and legal study - one is privity doctrine and another is the theory on third party beneficiary. The privity doctrine has a long history. It is not only expressly recognized in many counties' statutes but also applied generally in judicial practice. In contrast, third party beneficiaries theory became more and more important subsequently with the development of social economy. It attracted much attention and got recognition in the area of contract law as necessary in practice. In the western world, protection of the third party beneficiary by law is particularly reflected in the trust law, admiralty law and insurance law. But obvious this is not enough with the growth of the number of affairs concerning third parties' interests and rights who are involved in various contracts. A great debate on whether it is necessary to rebuild new third party theories spread in both Common Law and Civil Law. Especially in England, the debate lasted more than a hundred year due to its stubborn privity rule and consideration doctrine. At last the 1999 Contract Act was promulgated and shows common recognition of third party's rights in contract law in western world.Chinese new Contract Law was put into practice in 1999. In order to stand to the privity doctrine, the Contract Law recognizes that a third party has a right to receive the benefit agreed in the contract, but denies his right to enforce the contract on the other hand. Much legal study and cases have showed that it is difficult to deal with the third parry's loss by way of the creditor's claim both in theory and in practice. The only workable solution is empower a third party beneficiary to bring an action on the contract in his own name.The basic principles in Chinese Contract Law are the principle of autonomy of the will of parties and the Principle of Goodwill. The Contract Law aims to realize contracting parties' expectation interests by effectuate the parties' intentions in the contract. The establishment of third party beneficiary rule just aims to embody the principles and purposes above. Therefore, the specific content of the third party beneficiary rule depends on the contracting parties' true intentions. In this regard, the future third party beneficiary rule does not conflict with the privity doctrine because both are served to realize our Contract Law's purposes and the principle of autonomy of the will of parties in nature.