Privity essay notes Flashcards
Definition of privity
Only a party to a contract can enforce rights or have rights enforced against him: Tweddle v Atkinson
Definition of consideration
Consideration must move from the promisee (focus of the Tweddle judgement)
Common law exceptions to the privity rule
Agency, trust of a promise, bailment, recovery obo 3rd party, negligence, collateral contract, covenants
Statutory exceptions to privity
LPA 1925 S56(1)!! and Contract (Rights of Third Parties) Act 1999
What does the C(RoTP)A allow third parties to do?
Enforce benefits but not be burdened
Can third parties enforce benefits elsewhere
Yes, in civil jurisdictions from C17 onward
Are consideration and privity distinct?
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
Consideration + privity =
3rd party rule
Who and in what case discussed privity and considerations as separate issues
Viscount Haldane in Dunlop v Selfridge
Who conflates the doctrines of privity and consideration
Robert Flanigan - 2 ways of saying the same thing
Who says that in MOST cases privity and consideration amount to the same thing?
Treitel
What remedies does the promisee have when the promisor fails to bestow a benefit on the third party?
Specific enforcement (Beswick), damages (Jackson)
What did the HoL say about privity in Beswick
V critical, but seemed to have a fatalistic acceotance that nothing could be done about it - conservatism
What does S56(1)(1) say
That a third party can take a benefit in property (land/chattel)
What was Denning’s opinion in Beswick in the CoA
That S56(1)(1) allowed Mrs Beswick to recover on her own behalf
Why did the HoL overrule Denning’s decision
S56 looks like it would mean third parties could recover but that’s so radical it can’t be what it intended
Law Commission, 7 reasons for reform
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
Intention of contracting parties frustrated
Contracting parties not free to change their mind
Injustice to 3rd parties
Third parties who rely on other peoples contracts doen’t deserve much sympathy
Lacuna in the law
Reform of remedies would fix the lacuna, no need to confer rights on third parties
Common law exceptions confused
Act didn’t replace/abolish the remedies
Third parties can enforce rights in Europe
Civil law uses contract to cover tortious situations etc - not a useful or meaningful comparison
Difficulties in commercial life
Only in insurance and construction - they aren’t helped much and would be better served by specific statute
Borrows’ justification for IMPLIED conferral of rights
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.
Biggest problem with 3rd party rights
they trump the rights of the original contractors (once known of) - see example of gift / wife / divorce
Examples of liability being imposed on 3rd parties
Tort - It is a tort to induce a party to break a contract (Lumley v Gye), Bailment (Morris v Martin), Covenants
Good points of tort’s intervention re privity
Redress where otherwise none: Donoghue, White v Jones, Hedley Byrne
Bad points of tort’s intervention
Steps on the toes of contract - allows circumvention of time limits etc. Double payment in White v Jones
Whose are all the criticisms you just cited
Stevens
Who thinks the Act raises major implications for the future of the docrtine of consideration
McMillan
Definition of consideration
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
The case for recognising a contract for the benefit of a third party is simple and straightforward
Steyn LJ, Darlington v Wiltshier
Steyn LJ in Darlington v Wiltshier
The case for recognising a contract for the benefit of a third party is simple and straightforward
How could the Commission’s approach to contract be characterised
“reliance based” Mitchell
Possible implications of a reliance-based approach
Gratuitous promisees could also enforce a promise
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?
Yes! You need to know the underlying principles in order to aid decisions in later cases.
Example of reliance model of contract
Williams v Roffey
