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Privity of contract: Difference between revisions
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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. | 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 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> | 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 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!) | 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!) | ||
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*[[Contracts (Rights of Third Parties) Act 1999]] | *[[Contracts (Rights of Third Parties) Act 1999]] | ||
*[[Concurrent liability]] | *[[Concurrent liability]] | ||
{{ref}} | |||