Privity Flashcards
What is the rule of Privity in a contract?
Only the two parties to a contract can sue or be sued on a contract
Beswick v Beswick
Mrs B couldn’t bring a claim to Mr B’s weekly payments from his Nephew as she wasn’t a party to the contract
Exceptions - Group bookings
Jackson v Horizon Holidays
Jackson v Horizon Holidays
Jackson and individual family members were allowed to sue Horizon Holidays and claim compensation.
Exception: Agency
When one of the parties to a contract is acting as an agent (such as a parent) on behalf of the person who is suing and therefore they are able to enforce the contract and are treated the same.
Exception: Collateral offers
When the courts find a secondary contract exists with the 3rd party which is connected to the main contract.
- Shanklin Pier v Detel Products
Shanklin Pier v Detel Products
Collateral contract existed between the pier company and Detel products as the product company had promised it would last 7 years to the painting company which is why the pier company used it.
Exception: Restricitive covenants
An agreement between 2 landowners in which one of them promises that they will not do something on their land
- Tulk v Moxhay
Tulk v Moxhay
Tulk could enforce the covenant against Moxhay even though he was a third party as the covenants run the land so it is binding on future owners.
Exception- A third party could bring a claim in negligence
Donoghue v Stevenson
Donoghue v Stevenson
Claim in negligence brought after finding a snail in a drink, despite Donoghue being bought the drink from a friend.
Exception - Statutory exception
The contracts (Rights of 3rd Parties) Act 1999
Allows a third party to enforce a contract against either of the parties if the following conditions apply:
- Third party is identified in the contract by name, class or description
- Contract states that the party can enforce the contract
- Gives a benefit to the third party
