Privity essay notes

Question 1

Definition of privity

Answer 1

Only a party to a contract can enforce rights or have rights enforced against him: Tweddle v Atkinson

Question 2

Definition of consideration

Answer 2

Consideration must move from the promisee (focus of the Tweddle judgement)

Question 3

Common law exceptions to the privity rule

Answer 3

Agency, trust of a promise, bailment, recovery obo 3rd party, negligence, collateral contract, covenants

Question 4

Statutory exceptions to privity

Answer 4

LPA 1925 S56(1)!! and Contract (Rights of Third Parties) Act 1999

Question 5

What does the C(RoTP)A allow third parties to do?

Answer 5

Enforce benefits but not be burdened

Question 6

Can third parties enforce benefits elsewhere

Answer 6

Yes, in civil jurisdictions from C17 onward

Question 7

Are consideration and privity distinct?

Answer 7

Yes: If a man promises his daughter that he will pay £100 to any man who marries here, the contract is between the man and daughter, but the husband has provided the consideration. Daughter can enforce, but husband cannot. Treitel says this shows that the doctrines are separate

Question 8

Consideration + privity =

Answer 8

3rd party rule

Question 9

Who and in what case discussed privity and considerations as separate issues

Answer 9

Viscount Haldane in Dunlop v Selfridge

Question 10

Who conflates the doctrines of privity and consideration

Answer 10

Robert Flanigan - 2 ways of saying the same thing

Question 11

Who says that in MOST cases privity and consideration amount to the same thing?

Answer 11

Treitel

Question 12

What remedies does the promisee have when the promisor fails to bestow a benefit on the third party?

Answer 12

Specific enforcement (Beswick), damages (Jackson)

Question 13

What did the HoL say about privity in Beswick

Answer 13

V critical, but seemed to have a fatalistic acceotance that nothing could be done about it - conservatism

Question 14

What does S56(1)(1) say

Answer 14

That a third party can take a benefit in property (land/chattel)

Question 15

What was Denning’s opinion in Beswick in the CoA

Answer 15

That S56(1)(1) allowed Mrs Beswick to recover on her own behalf

Question 16

Why did the HoL overrule Denning’s decision

Answer 16

S56 looks like it would mean third parties could recover but that’s so radical it can’t be what it intended

Question 17

Law Commission, 7 reasons for reform

Answer 17

Common law thwarts the intentions of contracting parties 2. Injustice to third parties. 3. Lacuna in the law 4. Promisee may not want/be able to sue. 5. Common law exceptions are confused/ complicated/artificial. 6. In most other EU states a third party can enforce. 7. Difficulties in commercial life

Question 18

Intention of contracting parties frustrated

Answer 18

Contracting parties not free to change their mind

Question 19

Injustice to 3rd parties

Answer 19

Third parties who rely on other peoples contracts doen’t deserve much sympathy

Question 20

Lacuna in the law

Answer 20

Reform of remedies would fix the lacuna, no need to confer rights on third parties

Question 21

Common law exceptions confused

Answer 21

Act didn’t replace/abolish the remedies

Question 22

Third parties can enforce rights in Europe

Answer 22

Civil law uses contract to cover tortious situations etc - not a useful or meaningful comparison

Question 23

Difficulties in commercial life

Answer 23

Only in insurance and construction - they aren’t helped much and would be better served by specific statute

Question 24

Borrows’ justification for IMPLIED conferral of rights

Answer 24

Not everyone has access to a good lawyer. All contracts have implied rights - to make everything express woudl artificially constrict the law. The cases which showed we needed the rule, like Beswick and Jackson wouldn’t have been rescued by the act without the inclusion of implied term.

Question 25

Biggest problem with 3rd party rights

Answer 25

they trump the rights of the original contractors (once known of) - see example of gift / wife / divorce

Question 26

Examples of liability being imposed on 3rd parties

Answer 26

Tort - It is a tort to induce a party to break a contract (Lumley v Gye), Bailment (Morris v Martin), Covenants

Question 27

Good points of tort’s intervention re privity

Answer 27

Redress where otherwise none: Donoghue, White v Jones, Hedley Byrne

Question 28

Bad points of tort’s intervention

Answer 28

Steps on the toes of contract - allows circumvention of time limits etc. Double payment in White v Jones

Question 29

Whose are all the criticisms you just cited

Answer 29

Stevens

Question 30

Who thinks the Act raises major implications for the future of the docrtine of consideration

Answer 30

McMillan

Question 31

Definition of consideration

Answer 31

Some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. Currie v Misa

Question 32

The case for recognising a contract for the benefit of a third party is simple and straightforward

Answer 32

Steyn LJ, Darlington v Wiltshier

Question 33

Steyn LJ in Darlington v Wiltshier

Answer 33

The case for recognising a contract for the benefit of a third party is simple and straightforward

Question 34

How could the Commission’s approach to contract be characterised

Answer 34

“reliance based” Mitchell

Question 35

Possible implications of a reliance-based approach

Answer 35

Gratuitous promisees could also enforce a promise

Question 36

Does is matter whether the changes to privity are based on the principle of giving effect to the wishes of the contractors or the reliance of the 3rd party?

Answer 36

Yes! You need to know the underlying principles in order to aid decisions in later cases.

Question 37

Example of reliance model of contract

Answer 37

Williams v Roffey