What is the rule of Privity of contract?
A contract can only be enforced by and against the parties to the contract
A party can only recover his own losses (Dunlop v Selfridge, Beswick v Beswick).
What is required for both parties in a contract according to Tweddle v Atkinson?
Both parties must give consideration
This is a fundamental principle of contract law.
Under what Act can a third party enforce a contract in certain circumstances?
Contracts (Rights of Third Parties) Act 1999
This Act provides exceptions to the rule of privity.
What are the two circumstances under which a third party can enforce a contract according to Section 1(1) of the C(RTP) Act?
- The contract expressly states this right (S1(1)(a))
- The contract confers a benefit to the third party (S1(1)(b))
This was illustrated in the case of Nisshin v Cleaves.
According to S1(1)(3) of the C(RTP) Act, how must a third party be identified in the contract?
- By name
- As a member of a class
- As answering a particular description
If not identified, the C(RTP) Act will not be available.
True or false: A third party can enforce a contract under S1(1)(b) if the parties did not intend them to, according to Prudential v Ayers.
FALSE
S1(2) states that a third party cannot enforce if the parties did not intend them to.
What does S2 of the C(RTP) Act state regarding manipulation of the contract?
Parties may not manipulate the contract in a way that prevents the third party from enforcing it
This protects the rights of third parties under the contract.
What does Section 3 of the C(RTP) Act allow a contracting party to do?
Have a defense against the third party
This provides a layer of protection for the contracting parties.
What is the rule of privity in contract law?
There is no privity of contract between non-contracting parties
This means that only parties to a contract can enforce its terms.
What is a collateral contract?
A subcontract that allows a contracting party to enforce rights over a non-contracting party
Example: In Shanklin Pier v Detel, a specific type of paint was insisted upon, allowing enforcement of rights.
True or false: A restrictive covenant can bind subsequent purchasers.
TRUE
Example: In Tulk v Moxhay, a seller’s covenant not to build on land runs with the land.
What is an agency agreement in contract law?
An agreement where an agent makes a contract on behalf of a client
Example: In Scruttons Midland Sillicones, the client can enforce rights under the contract.
In the case of Jacksor v Horizon Holidays, what was significant about the contract?
The contract was made by one person on behalf of the whole party
This allows the contracting party to enforce rights even if they are a non-contracting party.
What does it mean when a restrictive covenant ‘runs with the land’?
It binds subsequent purchasers
This means that future owners of the land must adhere to the covenant.
