Privity of contract

Question 1

Basic rule of privity of contract

Answer 1

A contract cannot confirm rights or impose obligations arising under it on any person or agent except parties to it. This means that only the parties to a contract should be able to sue or enforce their rights (Dunlop v Selfridge)

Question 2

Common law privity of contract

Answer 2

The basic rule in common law says that third parties cannot sue or be sued under a contract even if they have an interest in its performance

Question 3

Tweddle v Atkinson

Answer 3

Even though a person was named in a contract, he was unable to claim a third party right

Question 4

Contract (rights of third parties) Act 1999

Answer 4

This act enables parties enforce contractual terms even where they are not a party provided:
s.1 (1) (a) - The contract expressly provides that they may do so; or
s.1 (1) (b) - The contracts purports to confer a benefit upon them, unless the parties did not intend it to be enforceable - Nisshin Shipping v Cleaves
1999 act tries to remedy unfairness by allowing 3rd parties to enforce in some situations
But its open to criticism as can have contract terms which exclude the act which most contracts do
1999 act cant impose liabilities on third party as unfair to impose contractual obligations on non consenting party

Question 5

Dunlop v Selfridge

Answer 5

Only parties to a contract can enforce it (privity of contract)

Question 6

Nisshin Shipping v Cleaves

Answer 6

The Contracts (Rights of Third Parties) Act 1999 allows enforcement of contract terms by named third parties