privity

Question 1

what is privity

Answer 1

A contract cannot give rights or impose obligations on someone who isn’t a party to it.

Question 2

what case establishes privity

Answer 2

Beswick v Beswick
* Court held that the aunt wasn’t a party to the contract, so there was no privity.

Question 3

what are the exceptions to privity

Answer 3

group bookings
agency
collateral contracts
restrictive covenants
alternative claim in negligence
statutory exceptions

Question 4

group bookings

Answer 4

A person who makes a contract can claim on behalf of third parties (e.g., family members).
Case: Jackson v Horizon Holidays
* Unfair to limit damages to just Mr J.

Question 5

agency

Answer 5

A contract applies to a third party if one of the original parties is acting as their agent.
Case: Scruttons Ltd v Midland Silicones Ltd
* D wasn’t a party to the contract and couldn’t rely on the exclusion clause.

Question 6

collateral contracts

Answer 6

A separate, secondary contract exists between a third party and one of the original parties.
Case: Shanklin Pier v Detel Products
* A collateral contract existed because Detel promised the paint would last 7 years.

Question 7

restrictive covenants

Answer 7

A promise in a land contract (e.g., not to build or run a business) binds future owners.
Case: Tulk v Moxhay
* The restriction applied to D even though they had no direct contract because it “ran with the land.”

Question 8

alternative claim in negligence

Answer 8

A third party may claim in negligence instead of contract law.
Example: Donoghue v Stevenson
* Manufacturer owed a duty of care to the consumer.

Question 9

statutory exception

Answer 9

Contracts (Rights of Third Parties) Act 1999
A third party can enforce a contract if:
1. They are expressly identified in the contract.
2. The contract allows them to enforce it.
3. The contract benefits them.