Privity

Question 1

What are the steps for privity?

Answer 1

Define
Contracts (Rights of third parties) Act 1999
How it links to consideration (agency situations)
Exceptions

Question 2

What is the principle of privity?

Answer 2

Parties can sue for breaches, but others cannot unless the rules of privity apply

Question 3

Which case shows the principle of privity?

Answer 3

Dunlop v Selfridge

Question 4

Which Act is privity in?

Answer 4

Contracts (Rights of third parties) Act 1999

Question 5

When can a third party enforce a term?

Answer 5

When:
They are expressly identified, or as a member of a class, or answering a particular description
The contract expressly states the third party can enforce the contract
The term is an attempt to confer the benefit of the term on the third party

Question 6

Which case shows that only parties are bound by the contract and can benefit from it?

Answer 6

Beswick v Beswick

Question 7

What do subsections 1(1a), 1(1b), and 1(2) state?

Answer 7

Third party can enforce if “the contract expressly provides he may” (s1(1a)) or if “the term purports to confer a benefit on him” (s1(1b)) but 1(1b) doesn’t apply “if it appears the parties did not intend the term to be enforceable by a third party” (s1(2))

Question 8

How does privity relate to consideration?

Answer 8

In agency situations where the agent stands in their shoes/acts on their behalf (since consideration must move from the promisee but this can cause injustice)

Question 9

Which case shows an agency situation?

Answer 9

Jackson v Horizon

Question 10

What is the equitable rule for privity?

Answer 10

Beneficiaries can’t claim for themselves, claimants can claim for beneficiary and their group/family

Question 11

What are the 2 exceptions to privity?

Answer 11

Agency situations
Collateral contracts

Question 12

What is a collateral contract?

Answer 12

A contract that is interrelated to another (a+b and b+c)

Question 13

Which case shows a collateral contract?

Answer 13

Shanklin v Detel

Question 14

What is the rule for collateral contracts?

Answer 14

In a case where there are 2 contracts A+B and B+C, if A breaches/breaks their contract, both B and C could sue them, even if A and C did not know about each other’s contracts with B

Question 15

What is a restrictive covenant?

Answer 15

A limitation on ownership of property (e.g. no pets, no covering a man hole cover)

Question 16

Which case shows a restrictive covenant?

Answer 16

Tulk v Moxhay