Privity

Question 1

What is the rule of privity?
Case?

Answer 1

Only someone who is a party to a contract can sue on it

Tweddle v Atkinson - son’s dad & father in law contract

Question 2

How many common law exceptions to privity are there?

Answer 2

1. Agency
2. Restrictive covenants that run with the land
3. Damages on behalf of others
4. Collateral contracts

Question 3

Exception to privity: agency

Answer 3

Agent = someone who enters contract on your behalf

Law treats you and the agent as one & the same

Question 4

Exception to privity: restrictive covenants that run with land

Case

Answer 4

promises to NOT do something on land, and EVERYONE who owns the
land is bound by it, no matter how old it is.

Tulk v Moxhay - person who set up covenant can sue anyone who breaches it, even if they’re not directly involved

Question 5

Exception to privity: damages on behalf of others

Case?

Answer 5

Those who are affected by D’s actions can sue even if they werent directly involved in a contract

Jackson v Horizon Holidays - whole family had bad holiday
> even if someone(s) is not directly involved in the contract, they can still get compensation

Question 6

Exception to privity: collateral contracts

Answer 6

if a contract is made as a result of a first contract, and an assurance of
quality is made to a party
of the first contract by the party of the second contract, they can sue them even though they technically weren’t involved

Question 7

What 3 things must you prove for collateral contracts

Case?

Answer 7

Shanklin Pier v Detel Products - S. hired B. to do work, D. guaranteed paint quality
> the guarantee of quality allows them to be sued

1. There are two contracts
2. 2nd contract was made due to first contract
3. 2nd contract involved guarantee of quality to C.

Question 8

What 3 parts of the Contracts (Rights of Third Parties) Act 1999 must you explain in a [20]

What case is used for Contracts (RoTO) Act 1999?

Answer 8

S.1 (1) (a)

S.1 (1) (b)

S.1 (2)

Nisshin Shipping v Cleaves - C. Got 1% commission in a contract
> C. deserves enforcable rights

Question 9

What does S.1 (1) (a) show about suing someone who’s not a direct party to a contract?

Answer 9

contract expressly states a third party can enforce it.
Eg. A + B make contract to build house for C, and contract says “Co can sue for incomplete work”

Question 10

What does S.1 (1) (b) show about suing someone who’s not a direct party to a contract?

Answer 10

Contract purports to confer a benefit on a third-party
Eg. A + B make contract to build house and contract states “house given in good condition”

Question 11

What does S.1 (2) show about suing someone who’s not a direct party to a contract?

Answer 11

Contract can exclude third-party rights
A + B make contract to build house for C, and contract says C cannot sue for in complete work
(overrides S.1 (1) (b)