The Legal Implications of the Application of the Doctrine of Privity of Contract in Tanzania

Abstract

Privity of contract is one of the cornerstones for the law of contract. A contract creates personal rights and obligations only for the parties to the contract. However, unlike the common law position, a third party in Tanzania is allowed to furnish consideration. This permission raises a question on privity of contract in Tanzania and whether a third party, who furnishes consideration or accrues a benefit can have any rights. The argument is that the doctrine of privity is unfavorable and it should not be preferred in consumer contracts and e-commerce. Privity to contract is unjust, it does not accommodate the interests of third parties even where there are genuine interests that arise in a contract and affect the third party. This paper is a critique of the application of the doctrine of privity of contract in Tanzania. It concludes that the application of the doctrine of privity in Tanzania creates a difficult environment for commercial relations. Therefore, there is a need to amend the Law of Contract Act and allow third parties to, in certain circumstances, enforce a contract to which they are not party to.