Privity of Contract Basic Principle 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) Beswick v Beswick (1968) Exceptions Contracts (Rights of Third Parties) Act 1999, s 1 Contract purports to confer a benefit on third party BUT NOT IF on proper construction parties did not intend it to be legally enforceable 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 a term of the contract if- (a)the contract expressly provides that he may, or (b) subject to subsection (2), the term purports to confer a benefit on him. (2) Subsection (1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party. Exceptions Nisshin Shipping Co Ltd v Cleaves & Co Ltd (2003) The Laemthong Glory (2005) contract referred to indemnifying charterer's agent. C of A agreed this could include ship owner, so burden of proof shifts to receiver to prove no intention to confer enforceable term owner able to sue for return of ship 1999 Act (cont) Changing the agreement - s 2 Possible unless TP has communicated assent; or TP has relied and promisor is aware; or TP has relied, and promisor could reasonably be expected to have foreseen this Defences - s 3 Generally available against TP as they would be against other party to contract 1999 Act (cont) Some contracts excluded from scope of Act, eg: Contract of employment, as against employee Carriage of goods by sea, other than in relation to exclusion clauses Common Law "Exceptions" Damages on behalf of another Jackson v Horizon Holidays (1975) Woodar v Wimpey (1980) Linden Gardens Ltd v Lenesta Sludge Disposals Ltd (1993)
Alfred McAlpine Construction Ltd v Panatown Ltd (1998) Trust of a Promise · Les Affreteurs Reunis v Walford (1919) · Re Schebsman (1944) Collateral Contract · Shanklin Pier v Detel Products (1951) · Wells v Buckland Sand & Silica (1965) Exclusion clauses · Agency - The Eurymedon (1975) · Modification of duty of care - Southern Water Authority v Carey (1985) - Norwich City Council v Harvey (1989) Imposing burdens Land law - restrictive covenants Tulk v Moxhay (1848) Broader application Taddy v Sterious (1904) - no Next week: Discharge by Performance Discharge by Breach