Privity

Question 1

What is privity?

Answer 1

the relationship between the parties in a contract

Question 2

what is a third party?

Answer 2

a person who isn’t a party to the contract and did not give consideration but still had an interest in the performance

Question 3

why could Mrs Donoghue not sue the café?

Answer 3

Donoghue v Stevenson-
as she was a third party to the contract she did not have the right to sue

Question 4

when a party to the contract tries to sue the third party?

Answer 4

Dunlop Pneumatic Tyre Co v Selfridge-
they had tried to sue the third party to the contract after they had sold the tyres below the recommended price

Question 5

what if the parties to the contract die before the third party can benefit from it?

Answer 5

Tweddle v Atkinson-
as Mr Atkinson could not sue for the money as he was not party to the contract so the estate could do nothing

Question 6

Benefits of the doctrine of privity?

Answer 6

You can’t be sued for a contract you did not agree to.

Question 7

Disadvantages of the doctrine of privity?

Answer 7

a person who has been given a gift may not be able to sue personally in relation to the goods

Question 8

common law exceptions to privity?

Answer 8

• Agency
• Collateral contracts
• Restrictive convents
• Holiday cases

Question 9

Agency case exceptions?

Answer 9

Allows the agency to make the contracts on behalf of another person yet if the third party breaches the contract it means they get sued and not the agency

Question 10

collateral contract exceptions?

Answer 10

Shanklin Pier v Detel products -
If a second contract can go along with the first then there is the ablitity to sue

Question 11

Restictive convents exeptions?

Answer 11

Tulk v Moxhay-
when the land is sold there is often a clause in the deeds which may restirct a person the original third party can make a claim

Question 12

holiday case exeptions?

Answer 12

Jackson v horizon holidays
as one person usually books the holiday it means that the damages are able to go beyond that of just one persons damages

Question 13

Staturory exeptions of the rule of privity

Answer 13

1. law property act allows the assignment of life policies
2. married woman’s property act 1882 allows a spouse to sue as a direct party upon the life policy
3. the road traffic act 1930 allows a victim of physical injury to sue the insureance comapny directly and to recover from the policy between the driver and the insureance

Question 14

two main aspects to the rule of privity

Answer 14

1. the third party cannot be made the subject of a burden
2. a third party cannot enforce the benifit purported to be granted by the contract

Question 15

law commision 1973

Answer 15

called for 3rd party who is expressly given rights under a contract to enforce those rights.
(case woodbar investments)

Question 16

law commision report 1996

Answer 16

contracts (rights of third parties) act 1999 happened due o the proposed that in some situations the privity rule should no longer apply

Question 17

3rd parties can sue in which situations

Answer 17

1. the contract expressly provides that they may do so
2. the contract purports to confer a benefit upon them, unless it is clear that the term was not intended to be enforcable by the 3rd party

Question 18

contracts (rights of third parties) act 1999

Answer 18

identifies that third parties can gain rights in circumstances where there is an intention a benefit was to be given to that party

Question 19

contracts (rights of third parties) act 1999
s.1

Answer 19

s1.1- third party may benfit from being able to enforce a contract not a party to
s1(1)(a)- contract expressly provides they may do so
s1(1)(b)- if the contract appears to benifit them while being intended

Question 20

contracts (rights of third parties) act 1999
s1(3)

Answer 20

the third party must be identified
*expressed
*member of a class
*recognised by description

Question 21

contracts (rights of third parties) act 1999
s1(5)

Answer 21

states that where the benifit is deemed to have been conferred on the 3rd party that person is to be treated as though they were part of the original contract.

Question 22

why was Mrs Beswick unable to claim?

Answer 22

beswick v beswick-
she was not party to the contract and had never given consideration as she was a third party