Privity Flashcards
What is the rule of Privity of Contract + cases ?
A contact can only be enforced by and against the parties to the contract ( DUNLOP v SELFRIDGE , BESWICK v BESWICK ) .
What does the rule come from + case ?
This comes from the need for both parties to give consideration ( TWEDDLE v ATKINSON ) .
What is the exception under S1(1) of the Contracts (Rights of Third Parties / C(RTP)) Act 1999 ?
It gives a third party the right to enforce the contract in 2 circumstances.
What are the 2 circumstances + case ?
The contact expressly states this right under S1(1)(a)) or the contract purports to confer a benefit to the third party, which can be interpreted under S1(1)(b) ( NISSHIN v CLEAVES )
What does S1(1)(3) state ?
The third party must be identified in the contract either by name , as a member of a class , or as answering a particular description. If they don’t , then C (RTP) Act won’t be available.
What does S1(2) state + case ?
A third party cannot enforce S1(1)(b) if parties didn’t intend them to (PRUDENTIAL v AYERS).
What does S2 state ?
Where a third party has a right under S1 , the parties to the contract may not manipulate the contract in any way which means the third party cannot then enforce the contract.
What does Section 3 allow ?
It allows a contracting party to have a defence against the third party.
IF RELEVANT : What does case law provide ?
It provides other “ special case “ exceptions where the rule of privity will not apply.
IF RELEVANT : What is a collateral contract ?
A subcontract that exists alongside the main contract .
IF RELEVANT : What rights do parties have in a collateral contract + case ?
If a contracting party to the main contract insists on the collateral contract , they’ll have rights over a party in the subcontract ( a non-contracting party ) as in SHANKLIN PIER v DETEL.
IF RELEVANT : What is a restrictive covenant and when can it bind subsequent purchasers + case ?
A restrictive covenant , such as an agreement to not build on land , runs with the land and binds subsequent purchasers ( TULK v MOXHAY ). It can be enforced even against a non-contracting party.
IF RELEVANT : How does an agency agreement affect third-party rights ?
An agency agreement where an agent makes a contract with another party on behalf of his client , the client can enforce their rights that contract.
IF RELEVANT : What happens when a contract is made on behalf of a family + case ?
Where a contract is made by one person on behalf of the whole family , as in JACKSON v HORIZON HOLIDAYS , each family member can enforce their rights under that contract.
