Privity

Question 1

Dunlop Pneumatic Tyre Co v Selfridge (1915)

Answer 1

Drew & Co bought motor accessories before selling them on. Bought tyres from D and sold them on to S. In the contract it was stated that D&C could not sell the tyres for any less than a minimum price, however Selfridge sold the tyres for less than this. D could not sue S as D’s contract was with D&C.

Question 2

Price v Easton (1833)

Answer 2

P worked for E on the basis that E would pay some of his wages to JP. E did not pay. Court held that JP could not recover the money, he had a contract with P, who had a contract with E, but JP had no contract with E.

Question 3

Beswick v Beswick

Answer 3

B formed a contract with his uncle, A, promising weekly payments. When A died his wife wished the payments to continue. She could not directly sue B as she had not formed a contract with him. She could however sue him in her role as the executor of A’s estate.

Question 4

Jackson v Horizon Holidays Ltd (1975)

Answer 4

Husband booked family holiday however it was not as described and was very unpleasant. It was held that a claimant can recover damages for a third party (the family) if the contract was made for their benefit, and the claimant can claim all that would have been available had they made the contract themselves.

Question 5

Linden Gardens v Lenesta Sludge (1993)

Answer 5

Property owner contracted with Lenesta to remove asbestos from a building. They then assigned all interests in the property to Linden Gardens, without the proper consent of Lenesta, so it wasn’t valid. Linden Gardens could not sue Lenesta as Lenesta’s contract had been with the original property owner.

Question 6

Alfred McAlpine Construction v Panalpine

Answer 6

Contract between main contractor, P, and property owner. P hired subcontractor, who carried out work poorly and caused big delays. P could sue the subcontractor on behalf of the owner even though P did not suffer a loss as it would not be fair if the subcontractor was not liable for any damages at all.

Question 7

Snelling v John G Snelling Ltd

Answer 7

3 brothers became company directors, each provided a loan for the company and agreed that if any of them should leave they would not sue the company for the loan. One brother left and tried to sue for the money, it was held that the other directors could intervene and prevent the claimant from suing the company.

Question 8

Shanklin Pier v Detel Products Ltd

Answer 8

SP hired a contractor to repaint the pier. They asked DP if their paint would be suitable, they said it would be. SP instructed the contractor to use the paint. The paint was of extremely poor quality. Held that there was a collateral contract between SP and DP, the assurance that the paint would be suitable was seen as a contract.

Question 8

Andrews v Hopkins

Answer 8

Hire purchase agreement for car, car dealer not part of actual contract, but a collateral contract was present between the buyer and the dealer.

Question 8

Adler v Dickson (1955)

Answer 8

A was injured falling from a negligently placed gang plank. She tried to sue the ship workers. Question of whether or not they were included in an exclusion clause in the contract between A and the ship. Held that the exclusion clause wouldn’t apply to the employees, but contracts can contain exclusion clauses limiting third party liability - now referred to as Himalaya clauses.

Question 9

Scruttons Ltd v Midland Silicone Ltd (1962)

Answer 9

Concerning the carriage of goods by A for B. Exclusion clause limited damages, but A’s employees damaged B’s goods. Held that the exclusion clause did not apply to the workers.

Question 10

New Zealand Shipping v AM Satterthwaite and Co (The Eurymedon)

Answer 10

Contract stated that A would be acting as an agent between B and any third party, B offered exclusion clause to third parties through A, accepted by performance and could be relied upon.

Question 11

Tulk v Moxay (1848)

Answer 11

Land was bought, but the land was affected by a restrictive covenant limiting what the land could be used for.

Question 12

Donoghue v Stevenson (1932)

Answer 12

Consumer couldn’t sue retailer because she hadn’t bought the drink herself, but she could sue for negligence.

Question 13

Nisshin Shipping v Cleaves and Co (2003)

Answer 13

Third party must be referred to by name, class or description for the Contracts (Rights of Third Parties) Act to apply.

Question 14

Avraamides v Colwill (2006)

Answer 14

A sued C for failures in the refurbishments of his bathrooms, however the company had gone bust, he relied upon the agreement made by C that all customer orders would be completed. A was a third party to C’s agreement, but he could not rely on it because no class was distinguished, the wording of the agreement was too wide.