Contract Notes - Privity

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Coulls v Bagot’s executor & Trustee Co ltd (1967) 119 CLR 460 By an agreement in writing, prepared without professional assistance, and headed “Agreement between C. and the O. Company”, C. granted to the company, in consideration of the sum of £5, the sole right for a specified period to quarry and remove stone from land owned by him and the company agreed to pay royalties at rates specified in the agreement. The agreement also contained provision for its extension and an authority by C. to the company to pay all moneys connected with the agreement to his wife and himself as joint tenants. The agreement was signed by C., by a person on behalf of the company and by the wife. Held, that the part of the document authorizing payment to C. and his wife in view of its terms did not constitute a legal or an equitable assignment of the debt to the wife and, further, not being supported by consideration, was not effective as an equitable assignment. Held, further, by McTiernan, Taylor and Owen JJ., that the transaction into which the parties had entered was a contract between C. and the company, together with a revocable mandate from C. to the company to pay moneys to the wife, that this mandate was revoked by C.'s death, and that, accordingly, the moneys payable under the contract were thereafter payable to his executor; Barwick C.J. and Windeyer J. dissented on the ground that the transaction was a contract with both C. and his wife whereby the company agreed to make payments to them jointly. Per Barwick C.J., Taylor, Windeyer and Owen JJ., McTiernan J. not expressing an opinion: If the transaction were truly a contract whereby the company promised C. and his wife to make payments to them jointly, the wife would be entitled to receive the payments after C.'s death, notwithstanding that she personally gave no consideration, and she would be able to enforce this right. The rights of B. and C. under a contract whereby A. promises B. for consideration supplied by B. to pay C. (a) in the case where the nature of the consideration given would have allowed the debtor to obtain specific performance and (b) where the consideration given was not of that nature, considered by Barwick C.J. and Windeyer J. Beswick v. Beswick , [1966] Ch. 538 , considered.

Observations also by Barwick C.J. and Windeyer J. upon the application of the doctrine of election to the interest, if any, conferred upon the wife by the agreement and a life interest in the income of a trust fund provided by C.'s will which contained the expression of C.'s wish that the land upon which the quarrying was being done should be appropriated to the fund. A house was bought by a husband as the matrimonial home and he had it transferred to himself and his wife as joint tenants. The husband provided part of the purchase money out of his own moneys and planned to sell the former matrimonial home, which was his property, to provide the balance, but as a temporary measure he arranged for two mortgages over the newly-acquired property to secure loans which enabled him to complete its purchase. Both the mortgages were signed by both the husband and the wife, on whom they imposed joint and several liability for the mortgage debts. At the time of the purchase, the husband announced, in effect, that he was buying the house for his wife. After the husband's death, his executor, following demands by the mortgagees, paid off both mortgages. The executor then demanded indemnity or contribution from the widow. Held, that the executor had no right to indemnity or contribution.

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co ltd [1915] AC 847 The plaintiff (Dunlop) sought to establish and enforce a resale price maintenance (RPM) scheme. The plaintiff sold tyres to Dew & Co (a tyre dealer) which then sold to Selfridge on condition that Selfridge would not sell below the list price. Selfridge failed to comply with the condition; the plaintiff sued for breach of contract. HELD:...
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