Privity of Contract Flashcards
What is privity of contract?
Obligations cannot be conferred on someone who is not a party to the contract
What was held in Dunlop v Selfridge?
Viscount Haldane said that Dunlop cannot sue Selfridge as:
1. Only a person who is a party to a contract can sue on it
and
2. There must also be consideration
What was held in Jackson v Horizon Holidays?
Lord Denning held that it would be unjust to limit the damages that Jackson was suing on his families behalf and his family benefitted from the holiday as well (despite there not being privity)
What are the exceptions to privity?
- Agency
- Collateral Contracts
- Contracts (Right of Third Parties) Act 1999
How is agency an exception to privity of contract?
When an agent is authorised to contract on behalf of another person, the principle will be bound by contract
What was held in Shanklin Pier v Detel?
There was a collateral contract between the paint manufacturers and the pier company that had consideration (an instruction to use detel’s paint)
What is defined in S. 1(1) C(RTP)A 1999?
“A person who is not a party to a contract may in his own right enforce a term of the contract if:
A. The contract expressly implies he may
B. The term purports to confer a benefit on him
What is stated in S. 1(2) C(RTP)A 1999?
S.1(1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by a third party
How may a contract “expressly imply” (S.1(1)(a)) that a third party can enforce a term?
If they are named, a member of a class or answerable to a particular description (in C(RTP)A 1999 S.1(3))
What was held in Beswick v Beswick?
If the C(RTP)A 1999 was in force then Mrs. Beswick would have been able to enforce the weekly payments as she was named and the term’s intention was to benefit her
What was held in Nisshin Shipping v Cleaves?
Burden of proof was on Nisshin to show that the parties did not intend for cleaves to be able to enforce the term
What was held in Dolphin Maritime Aviation v Sveriges?
“confer” a benefit connotes that language used shows one of the purposes of their bargain was to benefit a third party
