Contracts and Third Parties

Question 0

Shanklin Pier v. Detel Products Ltd 1951

Answer 0

The claimants had contractors paint their pier.
Defendants (paint manufacturers) assured their paint would last for at least seven years.
The defendants then sold paint to the contractors.
Paint peeled within three months.
Pier owners could not sue the painters (Who had carried out the work professionally)
Pier owners sued the paint manufacturers.
Held: Collateral contract arose from promise as to suitability of paint.
Successful claim.

Question 1

Dunlop v. Selfridge 1915

Answer 1

Dunlop sold tyres to Dew & Co. (Wholesalers)
Dew & Co. agreed to let Dunlop set lowest price. Dew & Co. also agreed to same terms for THEIR customers.
They sold tyres to Selfridge on these terms.
Selfridge sold at discount.
Dunlop sued Selfridge to prevent them from selling their tyres at a discount.
Held: Selfridge not party to the contract, Dunlop unable to impose terms upon them.
Related: Tweddle v Atkinson

Question 2

Tulk v. Moxhay 1848

Answer 2

Tulk owned land which he sold subject to an express promise that it would not be used for property development.
Land re-sold several times, subject to the same undertaking.
Moxhay bought the land and, despite knowing of the restriction, intended to build upon it.
Tulk sought an injunction to prevent Moxhay from building on the land.
Held: Claim successful.
Conditions:
1. Purchaser must have notice
2. Original owner must retain land that benefits from restriction.
Related: Restrictive covenant (LAND)

Question 3

Jackson v. Horizon Holidays Ltd 1975

Answer 3

Jackson booked holiday with family.
Whole experience was awful.
Jackson claimed on behalf of himself and family.
Horizon countered that the family were not part to the contract.
Damages awarded in respect of whole family (Damage to family was damage to Jackson himself)
Decision roundly criticized in House of Lords.

Question 4

Woodar v. Wimpey 1980

Answer 4

Wimpey entered into land purchase contract with Woodar for £850k
Third party (Transworld Trade) to be paid £150k of purchase price upon completion.
Market fell, Wimpey pulled out.
Issue: Should damages include Transworld?
Held: No.
Contrast with Jackson v Horizon

Question 5

Contracts (Rights of Third Parties) Act 1999, Section 1(1)–(3)

Answer 5

1. –(1) Subject to the provisions of this Act, a person who is not a party to a contract (a “third party”) may in his own right enforce a term of the contract if:
   (a) the contract expressly provides that he may, or (b) subject to subsection (2), the term purports to confer a benefit on him.

(2) Subsection (1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.
(3) The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.