Privity

Question 1

1. Def

Answer 1

Long-standing rule in common law that only those who are parties to a
contract are bound by it and can benefit from it (Tweddle v Atkinson)

Question 2

2. Issues

Answer 2

2. (Beswick v Beswick) unfair illustration of this rule as the Aunt was a beneficiary of the contract
   yet was unable to make a claim as she was not party to it

Question 3

3. Exception

Answer 3

Due to the law leading to unjust outcomes, judges created solutions to allow third parties to claim.

1. Award more damages to the claimant for them to share with others, which will be most applicable in a social and domestic situation. (Jackson v Horizon Holidays - illustrates this as the court awarded enough damages to cover the whole family)

Question 4

4. Solution No 2

Answer 4

A further solution a judge could use is by finding a collateral contract if the claimant has given consideration through a recommendation (Shanklin Pier v Detel illustrates this as the Pier had given express instruction to use the paint based on Detel’s assurances)

Question 5

5. Solution No 3

Answer 5

Finally, the third common law solution a judge could use is enforcing a restrictive covenant, where there is an agreement made to deal with the land in a certain way which binds subsequent buyers of land even though they were not part of the original agreement. For example, in the case of Tulk v Moxhay illustrates this solution as building on the land was restricted for future owners

Question 6

6. CRoTPA 1999 S1

Answer 6

Apply the Contract (Rights of Third Parties) Act 1999 section 1 allows
someone who is not a part of the contract to enforce the contract against either (or both) of the actual parties to benefit from the term

Question 7

7. Third party

Answer 7

A third party will be able to do this where the contract expressly states a third party can do this (s1(a)) or they would benefit from the term (s(1)(b)) (Nishin Shipping). Under s1(3) the third party must be expressly identified by name, class or description

Question 8

8. Exclusion clause

Answer 8

However, the statute will not apply if it appears that the parties did not intend a third party to benefit people and can also be expressly excluded through an exclusion clause

Question 9

9. Limitation clause

Answer 9

Also, businesses can limit liability by including a limitation clause which limits the amount of damages a party can claim if they are successful in suing D