Privity of contract: Difference between revisions
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Until 1999, the {{tag|common law}} was clear: only the parties to the contract themselves had an action under the contract: Even if the {{t|contract}} appeared to confer a benefit on someone else, that someone else could not take action to enforce the contract itself, and would have to rely instead on one of the parties doing do on its behalf. | Until 1999, the {{tag|common law}} was clear: only the parties to the contract themselves had an action under the contract: Even if the {{t|contract}} appeared to confer a benefit on someone else, that someone else could not take action to enforce the contract itself, and would have to rely instead on one of the parties doing do on its behalf. | ||
For example, let’s say I arrange to hire an apartment overlooking Fleet Street so that my son can watch the Lord Mayor’s parade. He likes that kind of thing. The {{t|contract}} is specific: I pay the lease for the day, and the landlord grants a specific licence to my son — not me — to occupy the house. On the appointed day, in breach of contract, the landlord refuses my son entry to the property. | |||
My son was not party to the contract and provided no consideration — therefore has no [[privity of contract]]. My son cannot sue under the contract. On the other hand, I do have privity, and I can sue | My son was not party to the contract and provided no consideration — therefore has no [[privity of contract]]. My son cannot sue under the contract. On the other hand, I do have [[privity]], and I can sue for [[contractual damages]] — but only for ''my own'' [[loss]]. I didn’t suffer any loss: I wasn’t entitled to enter the property. Nor can my son take action against me — Lord Mayor’s parade was his birthday present<ref>Look, we’re an unusual family okay?</ref>. So I have no damages to sue for, and the losses accruing to a third party (in this case, my son) — even one on whom you wanted the benefit to fall — do not count. | ||
To be sure, there | To be sure, there are always [[equitable remedy|equitable remedies]]: [[specific performance]] of the {{t|contract}} — devised by the [[courts of chancery]] precisely to cover a situation where [[damages]] would be inadequate sanction for [[breach of contract]]. But still, an aggrieved third party beneficiary of a contractual right would still have to rely on a contractual counterparty taking this action on its behalf (and being organised enough to obtain an injunction before the parade!) | ||
My son might try to make out a non-contractual [[duty of care]] and sue the landlord in [[negligence]], but the rules about [[concurrent liability]] in {{t|contract}} and {{t|tort}} would likely scotch that. | My son might try to make out a non-contractual [[duty of care]] and sue the landlord in [[negligence]], but the rules about [[concurrent liability]] in {{t|contract}} and {{t|tort}} would likely scotch that. |