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Privity
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Privity
Dunlop Pneumatic Tyre Co v Selfridges & Co = 'Only a person who is a party to a contract can sue on it'
Has 2 aspects to it:
- Who are the parties to the agreement?
- Has the claimant provided consideration?
Collateral Contracts
- Shanklin Pier v Detel Products = Consideration was the instruction given by the claimants to their contractors
- Contract between 2 persons (A and B) may be accompanied by a collateral contract between one of them ( eg B) and a 3rd party.
- Independent Authority v EMI Electronics = Promise won't amount to a collateral contract unless an intention established
Clarke v Dunraven = Where group of people join a club/competition, may deemed to be entering into a contract with all other members to abide by rules of club/competition
Consideration Component
- 1. Tweddle v Atkinson = Consideration must move from promisee
- 2. Dunlop Pneumatic Tyre Co v Selfridge & Co = Claimant must show promise was made to him & consideration moved to him
Justifications for Privity
- Tweddle v Atkinson = Doctrine rests on principle of mutuality e.g. unfair to allow a person to sue a contract where that person cannot be sued by the other
- Re Schedsman = Undesirable for 3rd party rights to be created by a contract. Restricting rights to amend/rescind their agreement
- Third-party beneficiaries are gratuitous recipients of the benefit in their favour
Contracts (Rights of Third Parties) Act
- S.1 (1) - A person who is not a party to a contract may enforce a term if test of enforceability is satisfied
- 2 ways in which the test of enforceability can be satisfied:
- 1. S.1 (1) a - Contract expressly states that a 3rd party has right to enforce provision
- 2. S.1 a & b - 3rd Party can enforce if expressly identified in contract & the term purports to confer a benefit on that third party
- Dolphin & Maritime & Aviation Services v The Swedish Club = Won't apply in the construction of contract where parties didn't intend term to be enforceable by the 3rd party
- Nisshin Shipping Co v Cleaves & Co = Burden on promisor to rebut presumption
- Dolphin & Maritime & Aviation Services v The Swedish Club = Won't apply in the construction of contract where parties didn't intend term to be enforceable by the 3rd party
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- Undergraduate [First Year] Contract Law Mind Map on Privity, created by Kieran Deaville on 17/12/2017.
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- Kieran Deaville
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