LECTURE 10 - PRIVITY OF CONTRACT - 25/02/2020 Basic Principle - The doctrine of privity provides that only a party to a contract can have rights or obligations under it. - Tweddle v Atkinson (1861) - Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915) Dunlop Pneumatic Tyre Co Ltd - Per Viscount Haldane LC - My Lords, in the law of England, certain principles are fundamental. One is that only a person who is a party to a contract can sue on it. Our law knows nothing of a jus quaesitum tertio arising by way of contract. Such a right may be conferred by way of property, as, for example, under a trust, but it cannot be conferred on a stranger to a contract as a right to enforce the contract in personam ... Rationale - The classical contract theory and the notion of a 'two-party' bargain. - The doctrine of consideration. Evading the doctrine (Exceptions) - Specific Performance- Beswick v Beswick - Damages on behalf of a third party - Collateral Contracts - Trust of a promise - Statutory exceptions - The Contracts (Rights of Third Parties) Act 1999. 1. Specific Performance - Enforcing your right. - Beswick v Beswick o Uncle and nephew. Uncle getting frail asked nephew to take care of business. Nephew agreed. Uncle passed away and nephew decided he did not want the business anymore. Wife wanted to sue, however, she was not part of the contract so she could not. 2. Damages on behalf of a third party - Jackson v Horizon Holidays (1975) - Woodar Investment v Wimpey Construction (1980) o Commercial agreement, parties tried to sue under privity. Courts held that doctrine of privity couldn't be used in commercial contracts.
- Linden Gardens Ltd v Lenesta Sludge Disposals Ltd (1993) - Alfred McAlpine Construction Ltd v Panatown Ltd (1998) 3. Collateral Contracts - Shanklin Pier v Detel Products (1951) - New Zealand Shipping v Satterthwaite, The Eurymedon o Shanklin wanted to use Detel products to preserve pier, they entered into a contract. Shanklin then wanted to sue as product was insufficient. Trust of a Promise - Les Affreteurs Reunis SA v Leopold Walford (London) Ltd (1919) - Re Schebsman (1944) - Vandepitte v Preferred Accident Insurance Corporation of New York Statutory Exceptions - Third Parties (Rights against Insurers) Act 1930- due to be replaced by the Third Parties (Rights against Insurers) Act 2010. - Married Women's Property Act 1882 (sec 11). - Road Traffic Act 1988 (sec 148(7)). - Carriage of Goods by Sea Act 1992. Contracts (Rights of Third Parties) Act - Contracts (Rights of Third Parties) Act 1999, sec 1 o Contract purports to confer a benefit on third party BUT NOT IF on proper construction parties did not intend it to be legally enforceable o Creates a rebuttable presumption: (1) Subject to the provisions of this Act, a person who is not a party to a contract (a 'third party') may in his own right enforce