T3 pt2 privity of contract Flashcards
doctrine of privity of contract
> only a party to the contract acquires rights and obligation under it
the court held that the contracts in both of the following cases were unenforceable as the the claimant was not a party to the contract
case example: Tweddle v Atkinson (1831)
The father of the bride entered an agreement with the father of the groom that they would each pay the couple a sum of money. The father of the bride died without having paid. The father of the son also died so was unable to sue on the agreement. The groom made a claim against the executor of the will.
contracts (rights of third parties) Act 1999
This act allows a third party to claim if all 3 requirements are met
- TP must be identified in the contract by name or as a member of class
- TP must be given the express right to enforce the contract
- Identifies the benefit or purports to confer a benefit on the third party
exceptions of privity
> where a contradictory statutory Provision applies
where there is an agency relationship
collateral contracts
Types of contract: UNILATERAL CONTRACTS, bi-lateral contracts
Unilateral contracts:
- one party pormises to do something in exchange for some act or performance by another –> Example: reward posters- e.g. find my dog and receive £100- you become bound
- Caselaw: Carlill v Carbolic Smokeball Co. ltd [1893]
Facts
The defendant, the Carbolic Smoke Ball Company, placed an advertisement in a newspaper for their products, stating that any person who purchased and used their product but still contracted influenza despite properly following the instructions would be entitled to a £100 reward. The advert further stated that the company had demonstrated its sincerity by placing £1000 in a bank account to act as the reward. The claimant, Mrs Carlill, thus purchased some smoke balls and, despite proper use, contracted influenza and attempted to claim the £100 reward from the defendants. The defendants contended that they could not be bound by the advert as it was an invitation to treat rather than an offer on the grounds that the advert was: mere ‘puff’ and lacking true intent; that an offer could not be made ‘to the world’; the claimant had not technically provided acceptance; the wording of the advert was insufficiently precise; and, that there was no consideration, as necessary for the creation of a binding contract in law.
Issue
Whether the advert in question constituted an offer or an invitation to treat.
Held
The Court of Appeal found for the claimant, determining that the advert amounted to the offer for a unilateral contract by the defendants. In completing the conditions stipulated by the advert, Mrs Carlill provided acceptance. The Court further found that: the advert’s own claim to sincerity negated the company’s assertion of lacking intent; an offer could indeed be made to the world; wording need only be reasonably clear to imply terms rather than entirely clear; and consideration was identifiable in the use of the balls.
types of contract: unilateral contracts, BI-LATERAL CONTRACTS
- A mutual exchange of promises between the contracting parties –> Example: (2 or more parties) business to business contracts- neutral exchange of promises, both agree that you will offer some consideration under the contract.
- Caselaw: Stevenson and Rogers [1999]
The defendant was a fisherman. He sold his fishing boat to the claimant. The claimant brought an action against the defendant based on breach of S.14 of the Sale of Goods Act as the boat was not of satisfactory quality. S.14 only applies to the sale of goods sold in the course of a business. The defendant argued that the sale of the boat was not in the course of his business. His business was catching fish and selling them, he was not in the business of buying and selling fishing boats.
Held:
The sale was in the course of the business and therefore the defendant did have to ensure the boat was of satisfactory quality.
repudiation definition
end contract with no further obligation
rescission definition
end contract and restore to pre-contract position
condition v warranty (case examples of each one)
CONDITION: you can get damages in addition to repudiation
case example: Poussard v Spiers (1876)
Facts
The Claimant (Poussard) was an opera singer. She was contracted by the defendant to perform in that capacity for a duration of three months. This was to subject to certain conditions, such as a salary of £11 per week, a start of “on or about” the 14th of November and an option to re-engage the Claimant’s services for another three months for a salary not exceeding 14 pounds per week. Instead of the 14th of November however, the launch performance was subsequently scheduled for the 28th of November, to which the Claimant gave no objection. However, she fell ill just before the start of the opera and could not sing for the first three days. The defendant hired another singer as potential cover and then actual cover when the claimant could not sing for the first three days of performances. Once the Claimant was well again, she wanted to take up her position in the performance but this was refused by the Defendant. An action for wrongful dismissal was then launched against the defendant. At trial, the jury found in favour of the defendant and awarded them the right to claim £83 from the Claimant, as it had been reasonable to hire her replacement. The Claimant appealed against this.
Issues
The issue in this case was whether failing to turn up to the first day of performance amounted to a breach of a condition of the contract.
Decision/Outcome
It was held that failure to turn up did amount to a breach of a condition of the contract as this went to its very root and that Spiers were therefore free to rescind the contract.
WARRANTY: An assurance or promise in a contract, the breach of which may give rise to a claim for damages. It is essentially a minor term of a contract.
case example: Bettini v Gye (1876)
Facts
The claimant, Alessandro Bettini (a tenor) entered into an agreement with the defendant, Frederick Gye. The terms of that agreement were that Bettini would not perform within 50 miles of London in any venue, apart from the Royal Italian Opera Covent Garden within the time period of 1 January 1875 to 1 December 1875. Further, between 30 March 1875 and 13 July 1875, Bettini would perform for Gye in return for £150 per month. The agreement also stipulated that Bettini must be in London 6 days before rehearsals “without fail”. Bettini however arrived two days before his performance period was to begin. Gye however declined to have him perform at his opera.
Issue
The issue in the case was whether the requirement to be in London “without fail” 6 days before the start of rehearsals was a condition of the contract and therefore, whether Gye could rescind the contract on the basis of the breach of that term.
Decision/Outcome
Blackburn J held that this requirement did not amount to a condition, but was instead a warranty which meant that Gye could not terminate the contract on that basis. A breach of this warranty is not a repudiation of the contract, and Gye would only have an action in damages.
In order for to determine whether the contract was repudiated, the court needed to ask whether what was breached was a term.
What is a condition and what are the consequences if one is breached?
A major term in the contract. If you don’t have that term, you can’t have effect on the contract. It also gives you the right to repudiate the contract.
DAMAGE TEST:
A damage test is done. If it is considered damage, it is deemed a condition if not it is deemed a warranty.
INNOMINATE TERM:
A term becomes innominate when it can’t be shown that it is a condition or warranty
Express v implied
Express: contained in contract- written/oral
Implied:
- as a matter of fact
- as a matter of law- by statute e.g. sales of goods act 1976
- trade usage, previous dealings, or local custom
e.g. business efficiency test: the Moorcock (1889)
e.g. official bystander test: Shirlaw v Southern Foundries (1926)
