Privity

Question 1

Give the intro for privity

Answer 1

C will be claiming that D cannot sue due to privity.
Privity is the concept that no one can be bound to a contract other than those who have given consideration.
For example, in Tweddle v Atkinson, where the son was unable to sue as he had not given consideration, but the father could sue as he had.

Question 2

Give the statutory exceptions for privity

Answer 2

There are many exceptions for privity in both the statute and common law. The statutory exceptions come from the Contracts Act 1999.

s1(1)(a) shows that a third party can enforce the contract if it gives them express permission to do so.
s1(1)(b) shows that a third party can enforce the contract if it suggests they should benefit.
s1(2) shows that third party rights can be excluded entirely if those with consideration wish to do so.

Question 3

Give the common law exceptions for privity

Answer 3

Under common law there are various exceptions to the rule of privity:

• Agency is where someone makes a contract on behalf of a principal as their agent, meaning they are legally treated as the same person, thus the principal has the right to sue.
• When a contract is made on behalf of others, damages may also be claimed on their behalf if necessary (Jackson v Horizon Holidays).
• Restrictive covenants run with the land, meaning that if a promise is made not to do something on land, then this will apply to any new owners of the land as well (Tulk v Moxhay).
• Collateral contracts are when a second contract is made on the basis of the first, in which a guarantee of quality is made. For example, in Shanklin, when Detel made an assurance to the contractors that the paint would last 7 years, when the paint did not last 7 years, the pier were able to sue Detel rather than the contractors.

Question 4

Give the eval for privity

Answer 4

• General rule of privity creates certainty as a party has given consideration or not. But, may create injustice as there are situations where one may not have given consideration but deserves rights.
• Above problem somewhat resolve by 4 common law exceptions as makes the law flexible and just. But, creates uncertainty leading to long complex cases.
• 1999 Act somewhat more clear as s1(1)(a) allows parties to agree third parties can sue which is good for certainty and freedom of contract. But, s1(1)(b) applies regardless.
• Could exclude from s1(1)(b) under s1(2) to retain certainty. But ability to exclude third parties could lead to unfair situations.