Privity Of Contract

Question 1

Privity of contract

Answer 1

Only those who are party to a contract are bound by it and can benefit from it
This is based on the need for consideration to pass from promisor to promisee
Can be unfair and so was avoided in (Jackson v Horizon holidays)

Question 2

Exceptions to private of contract

Answer 2

Agency
Collateral contracts
Contract (Rights of Third parties Act 1999)

Question 3

Agency

Answer 3

One party is authorised to make a contract on behalf of another person

Question 4

Collateral contracts

Answer 4

a collateral contract is a separate agreement between two or more parties that is connected to another contract. It’s also known as a collateral warranty.

Question 5

Intention to create legal relations business setting

Answer 5

Presumed ICLR in business; Business agreements presumption can be rebutted (Jenes v vernons pools)
Intention Is determined objectively based on the facts of the case

Question 6

Intention to create legal relations domestic setting

Answer 6

Presumed not to have ICLR
Can be rebutted (Balfour v Balfour)
If money changes hands it is more likely to be considered that parties had ICLR

Question 7

Contract rights 1999

Answer 7

A 3rd party can enforce terms of a contract in one of two situations:
S.1(1)a) if the 3rd party is specifically mentioned;or
S.1(1)b) if the contract purports to confer a benefit on them

Question 8

Contracts rights 1999 s.1(2)

Answer 8

However…. Says that the 3rd party cannot enforce their rights if it appears that the parties did not intend the term to be enforceable by the 3rd party