Privity of contract Flashcards
What is privity of contract?
Only parties to a contract can acquire rights and liabilities under that contract or sue/be sued under it
Leading case for privity of contract
Dunlop v Selfidge
Unfair for two parties to make a contract that would bind a third person (as they were not privy to the details)
Exceptions - collateral contracts
Allows the third party a right to enforce promises under a separate contract with the promisor
case for collateral contracts
Shanklin Pier v Detel products
Shankiln hired painters to paint their pier, detel claimed their products would last several years, painters said to use detel products - paint did not last long
Exceptions - Covenants
When land is sold, the purchaser often buys leasehold title; buying lease of the property - purchaser promises to do/not do certain things
Case for covenants
Tulk v Moxay
Covenants such as this ‘run with the land’ binds subsequent purchasers of a leasehold - Tulk was granted an injunction
Exceptions - Trusts
A legal device, enforceable in the law of equity in which a person, known as a trustee, holds property on behalf of another, known as the beneficiary
Case for trusts
Les Affreteurs Reunis SA v Walford
As shipowners did not pay, charter holds brokers right to sue on a trust for him
Exceptions - Agency
Contract of agency is a common law exception, parties in an agency agreement are as follows; principle, agent, third party
Exceptions - third party
Under rights of third party act 1999, a person who is not party to the contract can enforce it if she is named it or benefits from it
