ABSTRACT
Privity of contract is the basic notion that a contractual agreement binds only the parties to the agreement. It can have no legal effect on a third party. The doctrine of privity does not sit well in the context of social relationships in the South Pacific. Legislation often provides for action regarding death or personal injury to be taken against the insurer, even though the deceased or injured person was not a party to the insurance contract. Marine insurance policies may be taken out to benefit third parties, provided that the third party has an interest in the subject matter of the policy. Lord Denning argued that this provision destroyed the doctrine of privity in relation to all contracts governing any type of property, not just those land. The court or tribunal may dispense with the third party's consent, for example, where it cannot be obtained because his whereabouts are unknown.
