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Law of Contract notes on Privity and Third Party Rights
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Full class/revision notes including supporting case law on Common Mistake and Frustration under Contract Law
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PRIVITY AND THIRD PARTY RIGHTSTo what extent a person to the contract can gain enforceable rights under that contract.
ONLY THOSE WHO ARE A PARTY TO A CONTRACT CAN HAVE RIGHTS OR LIABILITIES UNDER
THAT CONTRACT
2-fold effect
- If you are not a party to a contract you cannot incur any BURDEN under that contract
- If you are not a party to a contract than you cannot incur any BENEFIT from that contract
3rd party x owed
money to price.
He promises to
do some work for
Easton and
Easton promises
to pay the money
to price for the
work X does for
Easton. The work
was done by X for
Easton but then
he fails to pay
price. Price failed.
One judge said
there was no
consideration for
the promise to
pay price.
Another judge said there was no privity of contract between price and Easton.
Tweddle v Atkinson: It would be unfair to allow the son to enforce a contract made expressly for
his benefit – when the son could not incur any burden under the contract nor be sued under it –
principle of mutuality. 2 dads contract to pay the kids a sum of money. Mr guy didn’t pay his
money and then promptly died. The groom tried to enforce the promise against the executor of
my guy. THE KIDS WERE NOT A PARTY TO THE CONTRACT SO COULD NOT ENFORCE.
CONSIDERATION MUST MOVE FROM THE PROMISEE.
Would be unfair to allow the son to enforce a term when he cannot be sued. Why should he be
able to have a benefit when he cannot have a burden? He cannot sue for a benefit when he cannot
be sued.
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