tuning. The doctrine of privity has relaxed enough to ensure that justice is
achieved but remains unshaken as a foundation of the law of contract.
Summary
The rule of privity according to common law:
- Only a person who is a party to a contract can sue on it – Dunlop v
Selfridge. - At common law this applies to both burdens and benefits – Tweddle v
Atkinson, Jackson v Horizon Holidays Ltd, Linden Gardens Trust v
Lenesta Sludge Disposals; but also see the Contracts (Rights of Third
Parties) Act 1999.
Established exceptions
- Statutory provision, for example the Married Women’s Property Act
1882, the Law of Property Act 1925, the Road Traffic Act 1988. - Agency – NZ Shipping Co v Satterthwaite Co Ltd (The Eurymedon).
- Collateral contracts – Shanklin Pier Ltd v Detel Products Ltd.
- Covenants which run with the land – Smith & Snipes Hall Farm v River
Douglas Catchment Board, Tulk v Moxhay.
Attempts to avoid privity of contract
- Attempting to apply land law to chattels (goods other than land) – Ta d d y
v Sterious, Lord Strathcona Steamship Co v Dominion Coal Co, Clore v
Theatrical Properties Ltd, Port Line Ltd v Ben Line Steamers Ltd, Swiss
Bank Corporation v Lloyds Bank Ltd. - Implying a Trust – Les Affreteurs Reunis SA v Walford, Re Schebsman,
Beswick v Beswick. - The Law of Property Act 1925 s.56(1) – Beswick v Beswick.
The Contracts (Rights of Third Parties) Act 1999
This changes the rule of privity regarding the enforcement of benefits by a
third party, but not of duties. The main provisions are:
- A third party may enforce a right under a contract if (a) the contract
expressly provides that he may, or (b) the term purports to confer a
benefit on him.
144 Contract law