Privity

Question 1

define the doctrine of privity

Answer 1

Privity is the doctrine that a contract cannot

1) impose obligations on,
2)nor be enforced by, anyone who is not a party to it,

even if the contract was made for their benefit, Donoghue v Stevenson

Question 2

Tweddle v Atkinson (1861)

Answer 2

Third party couldn’t enforce parents’ promise.

Significance: Illustrates the 2nd rule of the doctrine of privity. If a party provides no consideration they cannot sue.

Question 3

Jackson v Horizon Holidays (1975)

Answer 3

Father recovered for family loss for trash holiday.
Significance: Although only the contracting father could sue a holiday company damages could include the loss of comfort experienced by the whole family

Question 4

Shanklin Pier v Detel (1951)

Answer 4

Paint assurance = collateral contract.

Significance: Collateral contracts bypass/circumvent privity.

Question 5

Beswick v Beswick (1968)

Answer 5

In Beswick v Beswick, a nephew stopped making promised payments after his uncle died, so the widow wanted to enforce the contract.

Significance: Specific performance can be used to provide a third party a means where otherwise the contracting party would be unjustly enriched.

Question 6

What statute provides legislative solutions to privity?

Answer 6

Contract (Rights of Third Parties) Act 1999

Question 7

What does section 1 (3) of the CRA state

Answer 7

The third party must be expressedly identified in the contract by name or description.

Question 8

What does Section 1(2) of the CRA state

Answer 8

Parties can opt out if they did not mean for it to be enforceable

Question 9

What does section 1 (5) of the CRA state

Answer 9

they get the same remedies as a contracting party

Question 10

Nisshin Shipping Co v Cleaves

Answer 10

Brokers entitled to commission under contracts they weren’t party to Significance: The benefit was clearly conferred (section 1).