Privity of Contract

Question 1

Privity of contract - General rule

Answer 1

A contract cannot confer rights or impose obligations on any person(s) other than the parties to it. (Tweddle v Atkinson (1861))

Question 2

Tweddle v Atkinson (1861)

Answer 2

Claimant (Tweddle) married the daughter of the defendant. The defendant and the claimant’s father agreed to pay the claimant £200. They died without paying the £200. Claimant sue defendant’s personal representatives for the money. HL held that claimant could not sue on the contract because he was not a party to it and did not provide any consideration.

Question 3

Dunlop Pneumatic Tyre Co v Selfridge (1915)

Answer 3

Dunlop sold car tyres to Dew & Co. Dew & Co agreed that when they resold the tyres, they would make sure that the tyres would not be sold on below a certain price. Dew & Co resold the tyres to Selfridge. Selfridge resold them below the agreed price. HELD: Dunlop could not sue Selfridge as there was no agreement between them. Dunlop had given no consideration to Selfridge in return of the promise.

Question 4

Jackson v Horizon Holidays (1975)

Answer 4

When one person made a contract which was intended to benefit others (booking a family holiday or a meal in a restaurant)

Question 5

Woodar Investment Developments Ltd v Wimpey Construction UK (1980)

Answer 5

Substantial damages could not be recovered on behalf of third parties.

Question 6

Well- Established Exceptions to the Doctrine.

Answer 6

1) Assignment of Contractual Rights: s.136 Lar of Property Act 1925.
2) The Law of Agency. When a person appoints an agency.
3) Tort.
4.) Collateral contracts (Shanklin Pier v Detel Products (1951).

Question 7

Shanklin Pier v Detel Products (1951)

Answer 7

Collateral Contracts:
Claimants wanted the contractors to repaint their pier with the paint provided by the defendant. The paint only lasted 3 months. Claimant brought an action against the defendant. HELD. Although the main contract was between the defendants and the contractors, there was also a collateral contract between the defendants and the claimants which guaranteed the durability of the paint.

Question 8

Nisshin Shipping Co Ltd v Cleaves (2003)

Answer 8

Implied rights conferred to third parties of contracts: A charterparty contract provided that third party shipbrokers should be paid a 2% commission. However, the contract did not say whether or not the brokers could enforce it. CA held that shipbroker could enforce the payment as there was no need to show that the parties to the charterparty intended the brokers to be able to enforce the term.

Question 9

Laemthong International Lines Co v Artis (No.2) (2005)

Answer 9

Confirmed Nisshin Shipping v Cleave (2003). CA held that