Inbrief: Free Legal Information

 

Home   About   Advertising  Contributors 

 
   

Search In Brief

Over a thousand pages of free legal information written by our selected team of legal experts

 
 

  Browse Legal Topics               Ask a Solicitor Online

 

   
       

Contract Law

Introduction

Accepting a Contract

Contracts

Promise to Create Contract

Element of Contract Bargaining

Legally Enforceable Contract

Offer to Create Contract

Offer and Acceptance in Contracts

Incorporating standard terms

Privity in Contract Law

Notvation and Assignment Contracts

Ratification to Unauthorised Contract

Capacity

Capacity in Contract Law

Capacity of Mental Disability

Contract With Minors

Types of Contract

Contracts Relating to Employment Business

Contracts Promoting Immorality

IT Contracts

Electronic Contracts

International Contracts

Marriage Contracts

Contract For Sale of Goods

Conditional Sale Agreements

Collective Agreements

Deeds Contracts Under Seal

Licences for Ready Made Software

Bailment

Breach of Contract

Breach of Contract

Anticipatory Breach of Contract

Evidence Required  to Show Breach of Contract

Breach of Confidence

Disputes

Unfair Terms

Unfair Contracts

Undue Influence

Duress and Undue Influence in Contracts

Severance In Contract

Mistakes in Contracts

Contract Containing False Statements

Contents

Consideration In Contract

Contract Terms

What are Exemption Clauses

Exemption Clauses in Contract

Types of Exemption Clauses

Protection Against Exemption Clause

Legal Intent in Contract

Implied Contract Terms

Privity in Contract Law

In contract law, privity means the relationships that exist between those engaged in contracts. Privity also looks at consideration in contracts.

What are the Rules?

There are rules which stipulate who can take action to sue another party within a contract. In the case of Dunlop v Selfridge (1915), this is where there was a contract between two parties, Dunlop and Selfridge, however, a third party could not sue Selfridge over an agreement over the price because the third party was not in contract with Selfridge. The court decided that there was no contract between the third party, and it could not have the right to sue. The privity rule shows only those who have engaged in a contract have the right to sue.

However, in the case of Tweddle v Atkinson (1861), the contract was created for the benefit of a third party, but that person was not able to benefit from the payment that was intended for him under the contract.

The rules of privity can cause disadvantages, for instance in the case of Jackson v Horizons Holidays (1975), this is where the plaintiff, Mr Jackson, booked a holiday for himself, his wife and his two children. Mr Jackson was informed that his original holiday was not ready and was offered an alternative, which he accepted. However, the holiday tuned out unsatisfactory and Mr Jackson and his family were disappointed. The plaintiff sued the company for breach of contract; the company initially denied the claims made by the plaintiff, but later admitted liability. The court awarded Mr Jackson damages; but the court did not divide the damages between the family members, and only awarded them Mr Jackson. The court decided that it was for Mr Jackson to consider his family in the damages awarded, and that the court could not award them separately. Mr Jackson appealed, the court decided that he sued for breach of contract for himself and his family, and therefore his damages recovered were for him and his family. The court also decided that the figure awarded was right when considering himself and his family. However, it was decided that the damages could be extended to his family.

Exceptions to the Rule of Privity

There are certain exceptions to the rule of privity.

Rule of Privity

There have been cases which show how the rules of privity work.

Changes in the Law

There have been changes in the law to allow those to claim what was supposed to be for someone’s benefit. The Contracts (Rights of Third Parties) Act 1999 has made changes that allow rights to third parties. Section 1 of the Act begins, ‘a person who is not a party to a contract (a third party) may in his own right enforce a term of a contract if...’.

Still have unanswered questions?

Ask your legal question using the box below and have a response from solicitor or barrister within minutes.