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CONTRACT PORTFOLIO PART 1
Tutorial 1 – Privity 1) Examine the Privity rule and its relationship with the rules on consideration.
Privity is where someone not a party to a contract can be liable under neither it nor benefit from it. There has to be a promise from the party also some consideration. It is stated in the book 19th Century according to Richards that privity’s modern authority has been through the case of Dunlop v Lambert. In Dunlop v Selfridge[1] where there was a contract between Dunlop to the wholesaler and then to Selfridge, Dunlop stated not to sell tyres below the list price and the wholesaler created the second contract that if tyres were sold under the list price then it would be seen as a breach and there would be a fine of £5 for each tyre.[2] So this contract involved a third party which is the wholesaler in between. It was held in this case by Lord Haldane “in the law of England certain principles are fundamental. One is that only a person who is part to a contract can sue on it… a second principle is that if a person with whom a contract not under seal has been made is able to enforce it consideration must have been given by him…”[3] So this shows that it was for Dunlop to agree on this charge of £5 per tyre as they are under the seal of the contract. By using the rule stated from Dunlop v Lambert it states that the main contract holder in this case is Dunlop has less control that he would have if he had gone direct to the retailer to sell the product. So it seems there would have been more control if there were only two parties involved. Also under the rule Selfridge cannot get compensation if he suffers no loss. This rule has made it easier in Privity as it gives a remedy when parties had thought there was a breach and would cause damage to a identifiable third party and has there is no other remedy.[4] This allows the law on three party contracts being clear and consistent. In the case of Darlington Borough Council v Wilshire
Tutorial 1 – Privity 1) Examine the Privity rule and its relationship with the rules on consideration.
Privity is where someone not a party to a contract can be liable under neither it nor benefit from it. There has to be a promise from the party also some consideration. It is stated in the book 19th Century according to Richards that privity’s modern authority has been through the case of Dunlop v Lambert. In Dunlop v Selfridge[1] where there was a contract between Dunlop to the wholesaler and then to Selfridge, Dunlop stated not to sell tyres below the list price and the wholesaler created the second contract that if tyres were sold under the list price then it would be seen as a breach and there would be a fine of £5 for each tyre.[2] So this contract involved a third party which is the wholesaler in between. It was held in this case by Lord Haldane “in the law of England certain principles are fundamental. One is that only a person who is part to a contract can sue on it… a second principle is that if a person with whom a contract not under seal has been made is able to enforce it consideration must have been given by him…”[3] So this shows that it was for Dunlop to agree on this charge of £5 per tyre as they are under the seal of the contract. By using the rule stated from Dunlop v Lambert it states that the main contract holder in this case is Dunlop has less control that he would have if he had gone direct to the retailer to sell the product. So it seems there would have been more control if there were only two parties involved. Also under the rule Selfridge cannot get compensation if he suffers no loss. This rule has made it easier in Privity as it gives a remedy when parties had thought there was a breach and would cause damage to a identifiable third party and has there is no other remedy.[4] This allows the law on three party contracts being clear and consistent. In the case of Darlington Borough Council v Wilshire