As we have seen in Chapter 3 (confirmed in Dunlop v Selfridge), the
principle that consideration must move from the promisee is closely
connected to the doctrine of privity, but is still regarded as a separate
principle. To enforce a contract, a party must, then, show the following:
- that it is a party to the contract
- that it provided consideration.
The rule seems very reasonable when considering the imposition of a duty
on a third party, as nobody would want a duty imposed on them if they had
not agreed to it. However, when considering giving a benefit to a third party
the rule seems less fair. The following case may be remembered from
Chapter 3 (Consideration).
Difficulties may arise when the courts try to relieve injustice in particular
cases by avoiding, or ignoring, the strict principles of privity. A good
example of this is found in the following case.
134 Contract law
Tweddle v Atkinson (1861)A father and father-in-law agreed between themselves that they would
both pay a sum of money on the marriage of their son and daughter.
The son was not able to enforce payment due to him, even though the
contract between the two fathers was formed specifically for this
purpose. It was said that consideration was not given by the promisee,
and also that there was no privity between the son and father-in-law. In
fact the Contracts (Rights of Third Parties) Act 1999 has now made
changes in this area (see below).Tweddle senior
(father)Atkinson
(father-in-law)Privity of contract
(right to sue each other)Tweddle junior
No privity of contract so
no right to sueFigure 9.3