Contract Law: Privity and Third Party Rights

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Questions and Answers

What is the primary issue with finding a remedy for B in a contract breach?

B is not directly affected by the breach
C is not a party to the contract
B would not have received the money in the first place (correct)
A has no contractual obligation to B

What is the term used to describe B's interest in the contract?

Performance interest (correct)
Reliance interest
Expectation interest
Restitution interest

What was the outcome in the case of Beswick v Beswick?

The contract was declared void
Damages were awarded to B
A was found not liable
An order for specific performance was made (correct)

What was the significance of the Radford v DeFroberville case?

It held that B's claim against A for damages was not reduced by the fact that the contract also conferred a benefit upon C (A) Signup and view all the answers

What is the general purpose of an award of damages in a contract breach?

To put the party where they would have been but for the breach of contract (A) Signup and view all the answers

What was the limitation imposed by the House of Lords in the Panatown case?

The third party has a direct remedy against the promisor (B) Signup and view all the answers

In what situation can the court make an order for specific performance?

When the contract is for a unique subject matter, such as land (C) Signup and view all the answers

In what case did the court allow the promisee to enforce a contract for the benefit of a third party?

Linden Gardens Trust v Lenesta Sludge (C) Signup and view all the answers

What is the consequence of the Panatown decision on the exceptions to privity of contract?

The exceptions are now less widely applicable (B) Signup and view all the answers

What is the purpose of an order for the specific performance of a contract?

To ensure the promisor performs their obligations (D) Signup and view all the answers

What is the primary purpose of the devices created in various cases to circumvent the doctrine of privity of contract?

To provide a legal basis for the third party's rights at common law (C) Signup and view all the answers

What is the effect of the Contracts (Rights of Third Parties) Act 1999 on the doctrine of privity of contract?

It preserves the doctrine of privity of contract (B) Signup and view all the answers

Who can sue to enforce the promise in the scenario where A promises B to pay C £100?

B, the promisee, can sue to enforce the promise (B) Signup and view all the answers

What is the main difficulty with the enforcement of promises by the promisee?

Two difficulties can arise when the enforcement is to be made by the promisee (C) Signup and view all the answers

What is the primary aim of the courts when dealing with clauses seeking to exclude liability?

To give effect to the clause (B) Signup and view all the answers

What is the concept where a third party may be made liable for a promise made in consideration of the promisee's entry into the main contract?

Collateral contract (B) Signup and view all the answers

What is the outcome if a trust of a promise is successfully constituted?

The third party can recover the whole of the loss suffered (C) Signup and view all the answers

What is the Act that deals with the rights of third parties in contracts?

Contracts (Rights of Third Parties) Act 1999 (D) Signup and view all the answers

What is the typical reason for refusing to find a trust in favour of a third party?

Failure to prove any positive intention to create a trust (D) Signup and view all the answers

What is the case that illustrates the problem of privity of contract?

Raymond Burke Motors Ltd v Mersey Docks & Harbour Co (D) Signup and view all the answers

What is the primary concern of the doctrine of privity of contract?

Who can enforce a contract (C) Signup and view all the answers

Under the Contracts (Rights of Third Parties) Act 1999, when can a third party enforce a benefit conferred upon them?

When the contract confers a benefit on the third party, unless the parties intend otherwise (C) Signup and view all the answers

What is the additional requirement for a third party to enforce a benefit conferred upon them?

The third party must be explicitly named in the contract, or be part of a particular class or description (B) Signup and view all the answers

What is the significance of the Dunlop v Selfridge case?

Both a and b (A) Signup and view all the answers

What is the general rule of the doctrine of privity of contract?

Only parties to a contract are bound by it, and cannot compel third parties to do something (A) Signup and view all the answers

Why might the court view the lack of a conferment of a benefit on a third party as indication that there is no performance interest?

Because the parties have chosen not to confer a benefit (B) Signup and view all the answers

In what circumstance might the lack of a 'performance interest' allow a promisor to breach a contract with impunity?

When the parties have accidentally brought themselves within the ambit of the Act (A) Signup and view all the answers

What is the primary role of an agent in a contractual agreement?

To act on behalf of the promisee (D) Signup and view all the answers

What is the effect of an agency relationship on the contractual parties?

It creates privity between the principal and the third party (A) Signup and view all the answers

What is the significance of the Contracts (Rights of Third Parties) Act 1999?

It provided parties with the opportunity to confer a benefit on a third party (D) Signup and view all the answers

In what circumstances is a third party's protection from changes to a contract ensured?

Where the third party has communicated their assent to the term to the promisor (A) Signup and view all the answers

What can the contracting parties do to vary the extent of the Act's application?

Specify that the contract can be varied or rescinded by the contracting parties (C) Signup and view all the answers

When can a promisor rely on a defence or set-off in a contract?

When the third party brings a claim against the promisor (A) Signup and view all the answers

What is a limitation on the application of the Contracts (Rights of Third Parties) Act 1999?

The contracting parties must intend for the Act to apply (B) Signup and view all the answers

When does the Contracts (Rights of Third Parties) Act 1999 not apply?

When the contracting parties do not intend the Act to apply (C) Signup and view all the answers

What is required for a third party to enforce a term of the contract?

The Contracts (Rights of Third Parties) Act 1999 to apply (A) Signup and view all the answers

When can the contracting parties vary the extent of the Act's application?

In their contract, by specifying the extent of the Act's application (A) Signup and view all the answers

What is the significance of the Contracts (Rights of Third Parties) Act 1999?

It provided a statutory exception to the doctrine of privity of contract (B) Signup and view all the answers

What is the consequence of the Contracts (Rights of Third Parties) Act 1999 on the doctrine of privity of contract?

It provided an exception to the doctrine (B) Signup and view all the answers

When can the third party bring a claim against the promisor?

When the third party has relied on the term (A) Signup and view all the answers

Flashcards

Contract Breach Remedy Issue (B)

B wouldn't have received the money originally, so no remedy needed.

B's Contractual Interest

B's right to expect the contract obligations to be fulfilled.