Until recently, a person who was not a party to a contract could not acquire directly enforceable rights under it. This is known as the doctrine of "privity in contract?. The rule has been reformed by the Contrats Act 1999. But long before that, parties had sometimes found ways of avoiding this strict rule. The origin of the doctrine of privity in the modern law is TWEDDLE V ATKINSON (1861). It was confirmed by the HL in DUNLOP V SELFBRIDGE in 1915. The doctrine is sometimes based on considerating, and sometimes on the principle that only a party to a contract can sue. So are they really different doctrines or just two sides of a single principle?
[...] The doctrine of privity of contract Discussion 1. The doctrine of privity of contract Until recently, a person who was not a party to a contract could not acquire directly enforceable rights under it. This is known as the doctrine of privity in contract The rule has been reformed by the Contrats Act 1999. But long before that, parties had sometimes found ways of avoiding this strict rule The basis of the doctrine of privity The origin of the doctrine of privity in the modern law is TWEDDLE V ATKINSON (1861). [...]
[...] The claim of the plaintiff failed because of the doctrine of privity because a person who is not party to a contract can not sued on it. And in this case, there is no consideration moving from Dunlop to Selfbridge. Protection of the third party by the contracting party Beswick v Beswick (1968) Peter tranfered his coal delivery business to his nephew John. John undertook to make weekly payments to Peter and to Ruth, his wife. Then Peter died. After his death, John made only one payment to the widow. [...]
[...] The position as he is against the other party to the contract. He is protected against double liability. What is the position of the promisee ? He can still bring claims in his own name under the contract. Interaction of the act with other remedies for third party losses : It only adds a new remedy. It does not change the other remedies. Source materials The doctrine of privity of contract Tweddle v Atkinson (1861) The plaintiff is the son of the defendant. [...]
[...] The HL decided that the action couldn't be maintained despite the exception of near relationship between the parties because the plaintiff was not a party to the contract. Dunlop Pneumatic Tyre Co Ltd v Selfbridge & Co Ltd (1915) Selbridge bought a stock of tyres from a company. The tyres were manufactured by Dunlop. There was a contract concerning prices between the company and Dunlop. This company obtained a promise from Selfbridge to respect these prices. Dunlop sued Selfbridge to enforce the promise. [...]
[...] If the contract provides it OR not but the contract confers a benefit on him and he is expressly identified in the contract What rights does the third party acquire ? A right to enforce the relevant terms of the contract. But it is subject the promisor's ability to raise defences AND to reduction. Terms of the contract include exemption clauses : easier to apply Can the third party's right to enforce be later taken by the contracting parties ? [...]
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