Privity Flashcards
What is privity?
the relationship between the parties in a contract
what is a third party?
a person who isn’t a party to the contract and did not give consideration but still had an interest in the performance
why could Mrs Donoghue not sue the café?
Donoghue v Stevenson-
as she was a third party to the contract she did not have the right to sue
when a party to the contract tries to sue the third party?
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
what if the parties to the contract die before the third party can benefit from it?
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
Benefits of the doctrine of privity?
You can’t be sued for a contract you did not agree to.
Disadvantages of the doctrine of privity?
a person who has been given a gift may not be able to sue personally in relation to the goods
common law exceptions to privity?
- Agency
- Collateral contracts
- Restrictive convents
- Holiday cases
Agency case exceptions?
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
collateral contract exceptions?
Shanklin Pier v Detel products -
If a second contract can go along with the first then there is the ablitity to sue
Restictive convents exeptions?
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
holiday case exeptions?
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
Staturory exeptions of the rule of privity
- law property act allows the assignment of life policies
- married woman’s property act 1882 allows a spouse to sue as a direct party upon the life policy
- 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
two main aspects to the rule of privity
- the third party cannot be made the subject of a burden
- a third party cannot enforce the benifit purported to be granted by the contract
law commision 1973
called for 3rd party who is expressly given rights under a contract to enforce those rights.
(case woodbar investments)
law commision report 1996
contracts (rights of third parties) act 1999 happened due o the proposed that in some situations the privity rule should no longer apply
3rd parties can sue in which situations
- the contract expressly provides that they may do so
- 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
contracts (rights of third parties) act 1999
identifies that third parties can gain rights in circumstances where there is an intention a benefit was to be given to that party
contracts (rights of third parties) act 1999
s.1
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
contracts (rights of third parties) act 1999
s1(3)
the third party must be identified
*expressed
*member of a class
*recognised by description
contracts (rights of third parties) act 1999
s1(5)
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.
why was Mrs Beswick unable to claim?
beswick v beswick-
she was not party to the contract and had never given consideration as she was a third party
