Contract Law - Week 18a Lectures Privity of Contract Basic Principle . The doctrine of privity provides that only a party to a contract can have rights or obligations under it. . When you enter into a contract you can't impose an obligation on a third party · You cannot confer rights · Tweddle v Atkinson (1861) · Couple getting marries . Dad's said when they got married they'd give money . One father died - tried to sued estate . Held because boy wasn't a party to the contract he couldn't get any benefits from the contract . Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915) · C manufactured tyre · Contracted to sell to contractor - said don't sell below a particular price · Party then sold to Selfridge · Selfridge sold below particular price . Held Selfridge wasn't the party to the contract with Dunlop 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. Specific performance • Beswick v Beswick o Telling the party you have to do what is under contract o Uncle and Nephew
o Uncle told nephew to take over business and pay him a certain amount per week o Uncle passed away - said not doing it anymore o Wife tried to sue o Held the wife couldn't see because she wasn't a member to the contract Damages on behalf of a third party . Jackson v Horizon Holidays (1975) " Family holiday booked with D " Lots of problems Father tried to sue " Held father could sue on behalf of his family · Woodar Investment v Wimpey Construction (1980) " Commercial agreements " Held doctrine of privity cannot be loosened for commercial agreement . Linden Gardens Ltd v Lenesta Sludge Disposals Ltd (1993) . Alfred McAlpine Construction Ltd v Panatown Ltd (1998) Collateral Contracts · Shanklin Pier v Detel Products (1951) o Collateral contract o C went to D saying they owned a pier o Wanted to preserve it with paint o Detel recommended paint to do such thing o C went to their contractors to contract with Detel o Held Shanklin was allowed to sue . New Zealand Shipping v Satterthwaite,