Privity

Question 1

What is privity of contract

Answer 1

Only thos who are parties to a contract are bound by it and can benefit from it
seen in= Dunlop Tyre v Selfridge

Question 2

What did the Contracts rights of third party act 1999 modify

Answer 2

allows a third party to enforce a contract if =:

• the third part is expressly identifies by name or as a member to the contract
• the contract expressly provides the third party may enforce the contract
• the contract term is an attempt to confer the benefit of the term on the third party

Question 3

Beswick v Beswick

Answer 3

The court didn’t allow an aunt to claim for breach of contract after her husband died and had an agreement to continue to pay her after his death
Under the contracts right of third party act 1999 her claim would now be successful

Question 4

When can the contracts rights of third parties act not be applied

Answer 4

Where it is explicitly stated that it is not to be applied to a particular contract

Question 5

Relationship between the law on privity and consideration

Answer 5

The need for the consideration to pass from the promisee causes injustice (as the third party is not the promisee)

Question 6

Jackson v Horizon holidays

Answer 6

D and his family had a very disappointing holiday and tried to sue the company. The courts ruled that if they applied the rule from consideration (the consideration must pass from the promisee) then this would result in an injustice and therefore allowed the claim to be for him and his family

Question 7

Exception to the rule of privity

Answer 7

• Agency = where another makes a contract on behalf of someone, the contract will be bound for the person of whom the contract is for
• collateral contracts= Shanklin Pier v Detel
• Restrictive covenants = Tulk v Moxhay = where all buyers of land are bound by an agreement made by the initial buyer of the land