Contract Lecture Ten 20/11/18 Privity of contract and third-party effects What is privity? A person who is not a party to a contract cannot acquire any rights under that contract or be subject to any of the burdens of that contract Question: who can enforce the contract? Need to consider common law and statute - Contracts (Rights of Third Parties) Act 1999 Common law - restrictive; restrictive nature of the doctrine has led to the unfair impact Common law heavily criticised - confusing Similarities with consideration? Different focus. When we are talking about privity, we are talking about who can actually enforce that contract - even though we have the 1999 act, this is not the be all and end all of privity Doctrine of privity: background Law Commission Report A and B agree, under the contract, to pay C, or confer some other benefit on C. Can C sue? - this is the defining question of privity; C is not a party to the contract so the question is whether C can enforce the promise; C cannot sue A person who is not a party to a contract cannot acquire any rights under that contract A person who is not a party to a contract cannot be subjected to any of the burdens of that contract Heavily criticised Can a third party enforce a promise if they are not party to the contract; common law is clear - C is a third party and only a beneficiary of the promise, not a party to the contract as A and B are the only parties to the contract; means C does not have a right in common law to sue A or B if they do not actually give the money or other benefit that they promised in the contract between themselves - in this contract, A and B are the only parties who provided consideration - C is only a beneficiary of the promise and therefore cannot sue - a person who is not a party to the contract cannot acquire any rights to that contract But - exceptions developed General rule - had tough consequences in some cases. Unfair on the third party. Exceptions developed to allow third parties rights under the contract - but, lots were developed! Can be complicated and artificial Common law exceptions Equitable exceptions Statutory - key: Contract (Rights of Third Parties) Act 1999
+ Tweddle v Atkinson (1861) William Guy - father of the bride. Atkinson: his executor = D Written contract - pay William Tweddle £200. John Tweddle - father of the groom. William Tweddle - bridegroom and beneficiary of the promises Leading Authority for privity of contract is Tweddle - couple going to get married, fathers both said they'd pay £100 each to groom, fathers both name him in the contract as being someone who has the right to sue if they don't pay him, they don't pay, William Tweddle tried to sue his late father's estate - William Tweddle -