Formation of a contract: Privity of a contract Flashcards
What is the definition of privity?
Only those party to a contract are bound by it and can benefit from it
What case set out the concept of privity?
Dunlop v Selfrigde
Dunlop v Selfridge
Facts: Dunlop tried to sue selfridge but there was no contrat between them, just between Dunlop & Dew and Dew & Selfridge
Held: Dunlop not party to the contract between Dew and Selfridge, not permitted to sue
Beswick v Beswick
Facts: Nephew and Uncle agreed that uncle would sell business to nephew and nephew would pay weekly to uncle until he died and then to auntie until she died, when uncle died, he stopped paying
Held: Aunt was unable to cliam as she wasn’t party to agreement.
What is rule is privity based on?
That consideration must move from the promisee
Tweddle v Atksinson
Facts: Couple were getting married, father of bride and father of groom agreed they would each pay couple money, father of bride died without paying, groom made claim against executor of will
Held: Claim failed as groom wasn’t party to agreement and consideration didn’t move from him, not entitled to enforce contract
Jackson v Horizon Holidays Ltd
Facts: Mr Jackson booked a holiday for himself and his family, he sued horizon holidays on behalf of him and his family as holiday was disappointing
Held: Court allowed Mr Jackson to claim damages for him and his family
What are the general exceptions?
Collateral contracts
Agency
Restrictive Convenants
Statutory Exceptions
What is a collateral contract?
An agreement which runs alongside main agreement, either includes party into agreement or can be a term which has to be followed as part of original contract
Shanklin Pier v Detel
Facts: Contracts employed to paint pier, told to buy paint from Detel, Detel told contractors the paint would last 7 yrs, it lasted 3 months
Held: No privity of contract between pier company and Detel, collateral contract meant the peir company could still claim even though contract wasn’t made directly between claimant and defendant, there was consideration for collateral contract as pier company told contractor to use Detel
What is an agency?
When an agent is permitted to make a contract on behalf of another (principal), the principal is still bound by terms of the contract even though they didn’t make it, principal and agent are treated as the same person
What is a restrictive convenant?
When land is purchased, the seller and purchaser can form agreement regarding what can be done on the land.
Tulk x Moxhay
Facts: Tulk sold garden to another party, there was restrictive convenant on the land which stated the lanf couldn’t be built on, party sold the land to Moxhay who intended to build on the land
Held: Tulk could enfroce the convenant against Moxhayeven though there wasn’t a direct contract between them
What is the statutory exception?
Contract (Rights of Third Parties) Act 1999
What did the Contract (Rights of Third Parties) Act 1999 do?
Modified the rule of privity which was established in Dunlop v Selfridge
