Privity- Third Party Rights

Question 1

What is the doctrine of privity? consider common law

Answer 1

Only those who are parties to a contract can have rights or liabilities under it
At common law: parties to a contract CANNOT impose a burden on a 3rd party, neither to pass on a benefit

Question 2

Case law, where doctrine of privity is applied

Answer 2

Tweddle v Atkinson 1861- contract between the fathers of spouses. Groom tried to sue, after his father’s death- not liable to enforce
Dunlop Tyre v Selfridge 1915- Contract for sale price was between Dunlop and Dew, therefore they cannot sue Selfridge, no consideration

Question 3

Burden of a contract/benefit of a contract cannot be transferred to a 3rd Party- who supports this?

Answer 3

Collins 2003- Burden of a contract
Treitel 2011- benefits of a contract

Question 4

Arguments against the Doctrine of Privity- it weakens…/ isn’t always applicable to…

Answer 4

It’s outdated with modern commercial contracts- multiple parties are linked
it weakens the doctrine of consideration- case- William v Roffey Bros 1991

Question 5

Case law, where doctrine of privity is not applied/supported- enforcement of a promise

Answer 5

Beswick v Beswick 1968- wife was allowed to enforce contract as the uncle’s personal representative, after his death
Jackson v Horizon Holidays 1975- claimant could claim damages not for his own loss, but for that of his family too- Lord Denning

Question 6

Statutory Rights of a Third Party- 1999 Act- under which circumstances?
Clue: contrast this with the Tweddle v Atkinson Principle at common law

Answer 6

1. the contract expressly provides that he may enforce it- s1(1)(a)
2. the contract provides a benefit upon him

Question 7

Case law with the 1999 Act in practice

Answer 7

Nisshin Shipping v Cleaves 2003- a clause for commission, Cleaves was able to enforce contract under 1999 Act

also s1(6)- where are term limits liability- Blue Skye Fund 2013

Question 8

Common Law devices of enforcement of a contract + case law examples
Clue : there are 7, which refer to enforcement of promise, agency, tort of negligence, collateral contract and etc..

Answer 8

Enforcement of promise- shown above Beswick and holiday case contrast with Tweddle

If third party, which suffered loss had no remedy- Panatown v Alfred 2000- construction contract- contrast with Dunlop Tyre Case

The rule of Agency- Shanklin Pier v Detel Products 1951- representing the claimants, acting on their behalf

Limitations of Liability- New Zealand Shipping- exemption clause can be relied on by all sub-contractors

Collateral Contracts- Andrew v Hopkinson 1957- arise at the same time as the primary contract- refers to car warranty/car finance/insurance…

The trust- contract between 2 parties for benefit of the 3rd- Darlington BC 1955