Privity Of Contract Essay

A Contract Confers a Benefit to Enforceable Party in the English Law A Contract Confers a
Benefit to Enforceable Party in the English Law The Privity of Contract Introduction The privity
contract is a doctrine originating from the common law, which only allows the party to a contract
with obligations to sue either party. In this regard, the third parties to a contract have limited right
because the contract is binding to the parties. This implies that considerations can only exist as
promises, and third parties are not considered. In other words, the third party to a contract has
limited or no obligation at all to matters concerning the contract. The doctrine protects the contract
from abuse or interference that may be caused by the third parties (Palmer, 2006, p.46). The Privity
of Contract This doctrine originated from Tweddle v Atkinson (1861) case where the notion of
consideration, which moved from promise was given consideration. After this considerationГ‚ had
been applied in the Tweddle v Atkinson (1861) case, it was later confirmed through the 1915
Dunlop v Selfridge case. The law has served well in protecting the abuse of contracts by the third
parties despite the existing number of shortcomings. Over time, shortcomings of this doctrine have
cropped up leading to the development of exceptions to the application of the privity of contract
doctrine. Indeed, the privity of contract doctrine has been associated with a number of controversies
evidenced amongst
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Contracts and agreements are the basics of the business world. A contract is an agreement, but
not all agreements are contracts. "A contract is the voluntary exchange of promises between two
or more entities creating a legal obligation that is enforceable," (Hodge 153). In Malaysia,
contract law is governed and enforced by the Contract Act 1950 (CA 1950). According to Section
10 (1) of CA 1950, all agreements are contracts if they are made by the free consent of parties
competent to contract, for a lawful consideration and with a lawful object, and are not hereby
expressly declared to be void. In order to form a legally binding contract in Malaysia, the contract
must meet six basic elements of a contract. The first element is an offer....show more content...
Acceptance must be absolute and unqualified, which means the promisee's intention to accept
must be clearly understood; it must also be accepted in some usual and reasonable manner,
unless the proposal prescribes the manner in which it is to be accepted (S. 7(a)(b) CA 1950).
Both offer and acceptance can be either expressed or implied. In general, acceptance cannot be
withdrawn once it has been made. The third element of a valid contract is consideration.
According to Section 2 (d) of CA 1950, Consideration for the promise is when, at the desire of the
promisor, the promisee or any other person has done or abstained from doing, or does or abstains
from doing, or promises to do or to abstain from doing, something, such act or abstinence or
promise. An agreement without consideration is voidable. Consideration is usually made in order to
get something valuable in return, for example, money. However, the consideration must not be
unlawful and gratuitous. There are three types of considerations which are executory, executed, and
past consideration. Consideration is executory when there is an exchange of promises to perform
acts in the future. Meanwhile, when a promise is made in exchange for an act, when that act is
performed, it is executed consideration. If a party voluntarily acts and then the other party makes a
promise, the act is said to be "past consideration". Intention to create legal relations is the fourth
element of a valid contract in Malaysia. As

Contract Law Essay
Contract Law Bingham LJ's statement expresses well the purpose of the doctrine of frustration
which is to moderate the general rule, as expressed in Paradine v. Jane (1647), that, unless they have
been expressly qualified, contractual obligations are absolute. It does not tell us much about the
underlying principles of the doctrine. How and when does it apply and what are the effects?
Contract law needs certainty and a doctrine that excuses parties from the performance of their
obligations must, by necessity, be restrictive and unambiguous. By concentrating on the object of the
doctrine, however, the author reflects accurately the courts' modern trend of relying less on an
abstract theory...show more content...
As a final blow to Paradine, the House of Lords in National Carriers Ltd v Panalpina ltd [1981]
decided (obiter dictum) that a lease of land could be frustrated. The implied condition principle
was however showing signs of strain. It is for instance difficult to reconcile the decision in Herne
Bay Steamboat Co v Hutton [1903] with Krell. In the former the court decided that the contract did
still have some purpose as it was still capable of some performance, when it is obvious that the
object of the contract was in both cases the review/parade that went with the coronation. The court
should have taken a more detached and objective view of the contract without attempting an
artificial separation of motive and object. The subsequent criterion of the contract becoming
"radically different" from what the parties originally intended, as in the Metropolitan Water Board
case, or the "different adventure" factor in the Jackson case, marked a different, more practical and
just approach. The doctrine had to be restrictive however and during the closure of the Suez Canal in
1956, the courts were reluctant to apply the "different adventure" approach unless the contract was
very specific. Difficulty of performance

Privity Of Contract
Doctrine of privity of contract What does Privity mean– "Privity" means mutual or successive
relationship to enforce a promise or warranty. Doctrine of privity – contract cannot enforce liability
or obligation nor can grant rights to any person who is not a party to the contract. Doctrine of privity
has two basic ingredients Liability – parties cannot impose liability on the third party. In a contract
between two parties third party cannot be made liable for liability arising out of their contract.
Benefit– A stranger cannot claim for benefits arising out of the contract nor can claim for enforcing
the contract. This has been subjected to many criticisms It is said that the rights and obligations are
the private matters of the parties who are...show more content...
Exceptions to the rule of privity. 1.Beneficiary under trust or charge or other arrangement. A
person in whose favour a charge or other interest in some specific property has been created may
enforce it even though he is not a party to the contract. In Nawabkhwaja Muhammad Khan v
NawabHussaini Begum it was held that the respondent was although not a party to the agreement
but was clearly entitled to proceed in equity to enforce her claim. In Rana Uma NathBaksh Singh V.
Jang Bahadur . It was held that trust was created and he was entitled to maintain the suit. In one of
the cases in which an airline company made arrangement with a hotel for accommodating its
passengers. One of the passenger got injured because of the negligence of the hotel premises. His
actions directly against the hotel owner was allowed. 2.Marriage settlement, Partition or other family
arrangements Rose Fernandez V. Joseph Gonsalves girl's father entered into an agreement with
defendant in which girl after attaining majority could sue the defendant for damages for breach of
the promise of marriage and the defendant could not take a plae that she is not a party to the

A contract is a legally binding agreement and a term is a component of a contract and it is crucial to
determine the classification of term being adopted because if there is a breach of a term it will bring
about conditions of breach of contract. Different terms carry more severe consequences in contrast to
others, therefore the contract may be repudiated or damages awarded. However, terms in insurance
contracts are treated differently and further to this, the law around terms in insurance contracts has
undergone recent legislation. This essay will critically analyse and compare the differences between
warranty terms in insurance contracts and non–insurance contracts, evidencing with case law,
establishing the legal principles surrounding them and their components. Additionally, this essay
will address the introduction of the Insurance Act 2015 and its effect on insurance contract
warranties, which can be seen as a new initiative to make insurance warranties fairer. Conditions
and warranties are types of terms applicable within a contract. When a breach of warranty occurs
the consequences and remedies available to the innocent parties will differ than if a condition is
breached. The Sale of Goods Act 1979 designates certain terms as warranties, breach of which does
not allow the buyer to treat the contract as dis–charged, but merely to sue for damages, which is
applicable to non–insurance contracts only. In non–insurance contracts a warranty is recognised as a
minor

Webster dictionary defines a contract to be a legal agreement between people, companies, etc., a
document on which the words of a contract are written and or: an agreement to kill a person for
money (Webster, 2016). A contract is what binds verbal agreements to written agreements that can
hold one or another liable for any terms that are said in a contract. Although there are written
contracts some can and can't be held liable in a court of law. There are several things that are
important for a contract to have that can be held liable. The five things are: 1. Offer, 2. Acceptance,
3. Consideration (something of legal value given and received by each party to the contract), 4.
Capacity (mental capacity or legal ability), 5. Legality (of purpose). As one goes out into the career
field to gain employment some of those maybe entering in to regular forms employment rather its
hourly, salary an or commissioned. Others may enter into written contracts where there maybe
stipulations and circumstances that may or not take place before, after an or during employment.
Some companies such as Pepsi and Coke have stipulations that state that their employees can't be
publicly seen drinking or purchasing the competitor's product. Other such as Frito Lay whom are an
umbrella company of PepsiCo are put into a contract of the same statue. Can these stipulations be
held up in court if they are terminated for breaching their contract? The answer would be only if the
contract

Contract Laws Of A Country
Legal Contract Law – Contracts arise all the time in business relationships. It is important to
understand the contract laws of a country, so mistakes are not made while writing up contracts.
Incomplete contracts can cause problems if someone breaches the contract and stipulations were not
outlined ahead of time in the contract. Understanding contract laws of a country will enable the
company to avoid possible future problems that could end up being costly and timely for the
corporation. Manufacturer Warranty– This has to do with the relationship between the customer and
the company. When a consumer chooses a product, any expressed warranty on the product must be
upheld. If the company promises satisfaction guaranteed, then they must express what the returned
value would consist of if a consumer is not happy, and follow through on that promise. Consumers
expect a level of implied warranty as well, this means they expect a certain level of quality with a
product, and any failure of that means the company will also need to offer equal value for a failure
to meet that warranty. If a thumb is found in a can of Coca–Cola, the company must step up to
correct this issue for the consumer even though the circumstance was not outlined as an expressed
warranty on the can. Consumers expect a level of quality when they purchase a product, and the
company must stand behind the product. Product Liability – If a claim is brought against a company
for their product harming a

Case Studies : Contracts, Business, And Laws
Case Studies Analyses
Contracts, business, and laws are three simple little words, but when put together they have a
substantial impact on our everyday lives. Below we will discuss three case studies. The first case
is between Chris, Matt, and Ian vs. Donald Margolin, who was injured when he used an
aftershave lotion that he bought off the internet called Funny Face. The second case is between
Sam, his landlord, and a national chain store. Sam is being accused of conducting business from
his apartment and going back on a verbal promise. In the last case is two lifelong friends who
decided to join in a partnership and open up a sporting goods shop. Therefore, before the
appropriate court can proceed with the first case, the court should take into several considerations
around the rules of jurisdiction, alternative dispute resolution (ADR), and whether or not
corporation/or corporate offices can be held for the criminal or potential act. In the second case
before the court can rule the court should determine the various elements of a valid contract, if a
quasi–contract exists, a promissory estoppel, and the rights an obligation of a tenant would prevail
on Sam 's claims. Finally, in the third case between Jeb and Josh, they should determine the type of
business entity that will overall protect their business and personal needs.
Case Study One
In the first case, personal jurisdiction is one of the two forms of jurisdictions that a court must
consider before hearing a case.

Theories Of Privity
Some of the flaws of doctrine of privity is that it provides unfairness to the contractual system as
the third party's obligations and enforceable rights are prevented by this doctrine. A case to
support this can be seen in Tweddle v Atkinson. Following the doctrine of privity, the person who
suffered loss will not be given the right to sue but the person who did not suffer any loses has the
right to do so. This position can be observed in the case of Beswick v Beswick . In this case the
claimant husband entered into an agreement with his nephew. In the agreement they agreed that the
nephew would pay a sum of money to the man's wife per week upon his death. However, after the
death of the claimant's husband the nephew failed to fulfill his promise and plaintiff claim for the
money. The court held that claimant could not sue defendant (nephew) because she was not the
party to the contract. The contract was between her husband and his nephew. In this case, we can
see that plaintiff who had suffered loss could not sue even though the contract was made in benefits
of the plaintiff. This case is similar to Dunlop Pneumatic Tyre v. Selfridge and Co. Ltd . Another
case which...show more content...
There was a contract entered into between Scrutton and the shipping company. The goods, during
the shipping, were damaged due to the stevedores's negligence. The stevedores were in contract
under the shipping company regarding the exclusion clause. However, the court decided that the
stevedores were the third party thus could not be exempted by the exclusion clause. It even prove
the existence of flaws in the doctrine of privity when another case of Elder, Demspter & Co Ltd v
Paterson, Zachoni & Co Ltd suggested that with regards to the unfairness achieved in ScruttonLtd v
Midland Silicones Ltd, the doctrine should be circumvented and the right of the third party
beneficiary should be

The Doctrine Of Privity Of Contract
Introduction
The Doctrine of Privity Of Contract as found in the Common Law states that:
"... A contract cannot impose any obligations nor confer any rights arising from it, on any agent or
person, except the parties to it."
In essence, this means that only the parties to a particular contract should be able to enforce their
rights, or claim damages specific to the contract. On a detailed analysis, we may find that this
doctrine falls short of its intended mark when considered against contracts made for the benefit of
third parties, since they cannot enforce the imposed obligations (nor assume any rights) of the
primary contracting parties.
Privity may then be summarized as:
"A close, direct, or successive relationship; having a mutual interest or right."
The issue of third party rights when considering privity of contract has for a substantial period of
time then been ambiguous and controversial in its application, resulting in much confusion and with
various common law and statutory exceptions raised as a result.
I will argue for its urgent review, but first a brief history.
Brief History
The doctrine of privity as it relates to consideration emerged centuries ago, as early as 1861 in
Tweddle v. Atkinson. Privity was generally considered an aspect of consideration, being that
consideration must move from the promisee (third parties excluded). This principle meant that if
nothing is given for the promise of something to be given in return – an exchange –

This case study is based on the "Intention to create legal relationship". Intention to create legal
relationship is one of the essential elements in the creation of a binding contract and this intention is
implied by the actual that is cannot be concealed. To create a contract, both parties must have the
intention to create legal relations and agreements are legally binding, the law draws a demarcation
between social agreements, domestic agreements and agreements made in a commercial context.
The agreement will be legally bound with recourse to court action for its enforceability. The law
presumes the intention of the parties based on the type of agreement; domestic, social, business or
commercial agreement.
a)Pamela offered to pay Joe, her brother, if he would help with an assignment, which Joe has done.
But Pamela refused to pay her brother, Joe. This is can be described as a domestic agreement
between Pamela and Joe. In this case, we can see the agreement between the brother and sister.
...show more content...
If a person signed a document he is bound by its terms even if he has not read it. L'Estrange v
Graucob [1934] cited in Lawson (1998, p 100). Also under the common law, the wording of the
exclusion clause did cover financial losses that Mrs Joel has suffered as a result of using the
computer and so Office Supplies Ltd. is protected from any liability from Mrs. Joel. However,
under statutory rules, the UCTA 1977 makes exclusion clauses void, if they exempt liability for
death or personal injury or if they are unreasonable for other losses. Under the sale of Goods Act,
Mrs. Joel was not obliged to examine the computer and software before using them, but if she did
before using them, she lost the protection of the Act (Keenan, 2006). The common law rules and the
statutory rules also apply in exclusion

Contract Notes
Coulls v Bagot's executor & Trustee Co ltd (1967) 119 CLR 460
By an agreement in writing, prepared without professional assistance, and headed "Agreement
between C. and the O. Company", C. granted to the company, in consideration of the sum of ВЈ5, the
sole right for a specified period to quarry and remove stone from land owned by him and the
company agreed to pay royalties at rates specified in the agreement. The agreement also contained
provision for its extension and an authority by C. to the company to pay all moneys connected with
the agreement to his wife and himself as joint tenants. The agreement was signed by C., by a person
on behalf of the company and by the wife.
Held, that the part of the document authorizing payment to...show more content...
Trident General Insurance Co ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107
Blue Circle Cement entered into a contract of insurance with Trident. The insurance policy covered
liability for accidents occurring during this construction and defined the 'assured' parties as including
all Blue Circle's contractors and sub–contractors (which included McNiece). McNiece subsequently
became the principal contractor for work being carried out at the Blue Circle plant. A worker was
seriously injured and recovered a judgment against McNiece who sought indemnity under the policy
from Trident. Trident denied liability on the ground that McNiece was not a party to the insurance
contract.
McNiece succeeded at first instance in the SC of NSW. On appeal to the Court of Appeal the court
found there was no privity of contract and McNiece had not provided consideration to Trident.
Nevertheless they found for McNiece on the ground that under insurance policies beneficiaries can
sue on the policy despite no privity or consideration. Trident appealed to the High Court.
Held: At least in relation to insurance policies, and almost certainly in relation to contract of
indemnity generally, where the evidence is that third parties were in the contemplation of the
principal, then those third parties can enforce the contract. That was the

Warranties Are An Important Contract Term
a) Warranties are an important contract term which are applied to insurance policies (either
implied or expressly written into the contract) and essentially they outline a promise made by the
insured relating to facts of the risk or to something which the insured has agreed to do. For
example the warranty may require: Rubbish is to be cleared up each night and removed from the
premises The alarm systems are to be maintained in full working order and put into operation when
the premises are left unattended All outside windows and doors to be locked when the premises are
left unattended In the scenario described in the question the warranty imposed a continuing duty on
the insured to keep rubbish at least 15 meters away from the...show more content...
A legal case example of a clause being dealt with as a suspensory condition is the case of 'CTN
Cash and Carry Ltd v. General Accident Fire and Life Assurance Corporation Plc (1989)'. In this
case there was a clause in the policy which stated 'Warranted that the secure cash kiosk shall be
attended and locked at all times during business hours'. This was prior to The Act 2015, however,
despite the clause using the term 'warranted' the court held it to not be a warranty but rather a
suspensive condition or a clause describing the risk. This enabled insurers to repudiate the claim
but the policy didn't terminate for breach of warranty. Sometimes circumstances dictate that a
remedy is not available i.e. if there is a breach of a warranty and the insured asset is destroyed as a
result of the breach then there isn't the opportunity to remedy the breach. In terms of the claim
situation stated in the question, due to The Act 2015 the breach of this warranty would have resulted
in cover being suspended from the date of breach although unfortunately the insured wasn't able to
remedy the situation before the claim occurred and thus the insurers wouldn't be liable to pay the
claim. However, if the insured were able to prove that insurers knew about the breach and

Contract Law For The English Law
Contract Law What is a contract? There is no exact definition of a contract stated in the English
law, but a contract simply occurs when two or more people comes to an agreement, under the
law, to refrain or to do something having a legal relations and not just an exchange of mutual
promises. In common English law, there are 3 essential points in order to create a contract, which
is, the agreement, contractual intention, and consideration in both parties. Typically, an
agreement can happen when one party makes the offer, which is then accepted by the other party.
To decide if the agreement is valid, the court will have to do an objective test. The " freedom of
contract " has an important impact on the English law of contract today since it allowed parties
the freedom to make any agreement they want to make as long as they are legal and also that the
agreement doesn't include any form of unfairness or unjustified influence. In this essay, it will
cover when a contract arise and the different ways a contract may come to an end under the
English Law. Firstly, a contact arises when the first party makes an offer to the second party and
expresses the willingness to contract on specific terms if there is a proper acceptance of it. An
offer can be made between one party to another one party and one party to any member of a party
or one party to the world at large. Offer may be bilateral or unilateral. The most common one is the
bilateral contract; an agreement that both parties

3. What problem was the Contract (Rights of Third Parties) Act 1999 intended to solve, and has it
succeeded? Before we can delve into the question of the Contract Right of Third Parties Act 1999
we must first discuss the ideology of Privity in contract law. This is something that has been
prevalent for many years and is a highly controversial doctrine. In this essay I shall discuss the
changes bought forward by the Act, define the doctrine and delve into the extent of the success of
the Act taking into consideration it 's many various criticisms. The Doctrine of Privity generally
details that one cannot impose obligations deriving from it on any individuals who are not the
parties bought forward. It is composed of two main rules....show more content...
Thus far, case law denotes that the doctrine of privty conjured up many criticisms. Prior to the
contracts (Rights of Third Parties) Act 1999 a great array of problems with the docterne was
evident. This could largely be broken down into four key issues . Firstly , the doctrine provided
many examples of failing to honour intentions of parties. In Tweedle, the DoP obstructed the
intentions of the contracting parties and agreements were frustrated by the DoP . Secondly, When
courts tried to divert the DoP around its obstacles for third parties, issues arose as it was very
complex, artificial and as seen in the case of New Zealand Shipping Company – doubt was placed as
to whether it was even possible. It was found far too complex a task to give effect to the parties
intentions.Thirdly, it was thought outrageous in circumstances were a person who had suffered no
loss was eligible to sue whereas an individual at loss could not. Particularly in commercial issues as
stated in Scruttons and most notably the difficulties of The Eurymedon, whereby commercial
transactions had to seek other forms of protection, such as statutory footing in order to avoid the
unfavourable outcomes of privity. Furthermore, the great Injustice of privity was widely
acknowledged. when a third party controlled his affairs, he did so on the basis that he will be
exempt unless benefitting from the promise of the promisee, as noted in

Tender-Invitation to Treat-Contract Law
Contract Law Presented by Kerra Bazzey Contract Law Formation of a Contract Terms of a
Contract Discharge of a Contract Remedies for Breach of a Contract Formation of a Valid and
Enforceable Contract Offer Acceptance Consideration Intention to Create Legal Relations Privity of
Contract Capacity to Contract Must not be illegal or contrary to public policy Formation of a
Contract A contract is an agreement which creates legal rights and obligations between the parties to
it. It is formed when the parties reach agreement on the essential features of the bargain. Offer – a
statement made by a party which manifests an intention to be bound on precise terms. The person
who makes an offer is known as the offeror...show more content...
Display of Goods on a Shelf A store owner who displays goods on a shelf with the price attached
does not make an offer. He is merely inviting the public to make an offer to buy the goods at the
price stated. Auction Sale The general rule is that in an auction sale, when the auctioneer invites
bids, this is not an offer but an invitation to treat. When the bidder responds with a bid, he is in
fact making an offer and the auctioneer is then free to accept or reject this. Invitation to Treat
Invitation to Tender Generally a request to tender will be considered as an invitation to treat. Any
tender document which is submitted in response to this request is an offer and the invitee of the
tender is then free to accept whichever offer he chooses. Termination of an Offer (i) Revocation or
withdrawal of an offer by the offeror (ii) Counter offer (iii) Lapse of time (iv) Death (v)
Non–fulfilment of a condition precedent Termination of an Offer (i) Revocation– A revocation is a
withdrawal of an offer. An offer can be revoked at any time before it is accepted because there is
no binding contract before acceptance. An offer cannot be revoked after it has been accepted. A
revocation must be communicated to the offeree to be effective. If it is not, and the offeree accepts,
there will be a contract. Termination of an Offer Consider the following: By letter dated 1st

Case on Privity of Contract
Capacity and Privity of Contract
LGST101 Business Law Professor George Shenoy
Group Members: Ue Mu En, Esther Goh Yue Lin, Sylvia Fong Li Chu Sabina Sun Chao Ng Shi Ya
1
Content Page 1. Case Summary 2. Can Brad sue Jennifer? 2.1 2.2 2.3 2.4 Validity of ContractBreach
of Contract Brad cannot sue Jennifer Brad can sue Jennifer
3. Can Angelina sue Jennifer? 3.1 3.2 Angelina cannot sue Jennifer Angelina can sue Jennifer 3.2.1
3.2.2 3.2.3 Contract (Rights of Third Parties) Act Tort of Negligence Rule of Agency
4. Can Brad sue Jennifer on 4.1 Action of Promisee on behalf of Third Party (Albazero Exception)
5. Conclusion
2
1. C ase Summary This case involves 3...show more content...
There is an indication of willingness to be bound as seen from the drafting and signing of
contract. Jennifer indeed does have the power to bind Brad upon acceptance of the offer as Brad is
liable to be sued by Jennifer for breach of contract if he refuses to pay after Jennifer has installed the
Superspike.
4
What then, defines acceptance in a legal sense? Acceptance must be final and unqualified, and
communicated to the offeror. Brad and Jennifer both sign the contract in the presence of both
parties, and agree to no other terms apart from those stated in the contract. Therefore, our group
recognizes that Brad is the offeror and Jennifer is the offeree of the contract. Brad calls Jennifer
regarding the fixture of the 40cm Superspike end–pin on the cello and offers to pay her s offer of
$2,000 and agrees to the installation. Secondly, consideration must be present. Consideration is
defined as something which has value in the eyes of the law and is given in exchange of a promise.
Consideration can be in the form of a benefit or detriment requested for by the promisor, and must
move from the promisee to the promisor. Applying the
form of a benefit conferred upon Brad (installation works performed on the cello) or a detriment
suffered

consideration by conferring upon Jennifer a benefit ($2,000 as payment) or by suffering a detriment
(having to part with his money). Thirdly, there must be an intention to

Privity and Law of Contract
Contents QUESTION –13 The Doctrine of Privity3 The meaning, history and evolution of the
doctrine3 Relationship between privity and consideration4 Privity under different laws5 PRIVITY
AND THE LAW OF AGENCY5 Privity and Agency by Estoppels or Holding out6 Privity when
Sub–agents or Substitute agents are appointed6 PRIVITY AND THE LAW OF PARTNERSHIP7
Privity and the act of civil and criminal liability of partners8 Privity and the liability for holding
out8 PRIVITY AND THE LAW ON SALES OF GOODS9 Contracts Concerning Land10 PRIVITY
AND THE LAW ON HIRE PURCHASE10 QUESTION 211 Analysis of the case to establish
formation of contract12 Was Mike obligated to sell furniture to Nilam13 Nilma's Rights and remedies
...show more content...
This fact is established in the case of Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge & Co. Ltd.
(1915) where Dunlop sold its tires to a whole seller on condition that it should not be sold below a
certain price. On that condition whole seller sold them to retailers and Selfrisge & Co. Ltd was
one such a retailer who sold below the specified price. There appeared to be no privity of contract
between Dunlop and Selfridge. The court also held that consideration does not flow from Dunlop
to Selfridge thus it was not possible for Dunlop to sue Selfidge. However, unlike the English law,
there is a deviation in who can give consideration in the Malaysian Law. Under the Malaysian
Contracts Act 1950, consideration for the contract need not necessarily come from the promisee.
But still the promisee can enforce the contract even if he has not personally provided any
consideration provided that some other person has given the consideration. This is established in
the case of Venkata Chinnaya v.Verikatara'ma'ya (1881) I.L.R. 4 Mad.137. In this case a sister who
agreed to pay an annuity of Rs.653 to her brother who provided no consideration for the promise. On
the same day, their mother gave the sister some land on condition that the sister pay annuity to her
brother. Later the sister failed to pay the annuity. The court held that the sister was liable to pay the
brothers even though no consideration was given by him. But the consideration from their mother
was

Audit: Doctrine of Privity and Case Study
Doctrine of Privity Doctrine of privity of a contract dictates that only parties to a contract will have
rights or obligations arising under a contract to hinder the imposition of burdens on and the granting
of contractually enforceable rights to third parties. The doctrine constitutes a barrier to freedom of
contract that can frustrate the intention of the parties by not allowing them to confer mutually
advantageous benefits on third parties, or lead to negative outcomes such as unjust enrichment and
the prevention of third parties from justifiably vindicating their rights under the main contract.
Therefore, exceptions and alternatives remedies have emerged to overcome situations where the
doctrine would lead to an unfair or...show more content...
An invitation to treat may be seen as a request for expressions of interest as per the case of Fisher v
Bell (1961). a) As to her legal relationship / obligations to Ben The first scenario states that Ann an
antique coin dealer displayed gold plated 1839 five pounds (299g) 86X7 mm coin along with a
description for offer at ВЈ350'. Ben noticed the offer as he walked past the shop and wanted to buy
it. Unfortunately he was running out of time as he has to attend a meeting. After his meeting, he
went back to Ann's shop to ask further questions about the coin. Ben told Ann that he would give a
definite answer by Monday. Later that same day, he wrote a letter agreeing to buy the coin at the
stated price of ВЈ350. On Monday morning, Ann received Ben's letter before Daisy arrive to make
her payments. By virtue of Ann putting the coin on display for sale is merely an invitation to
treat as per the case of Fisher v. Bell, whereby the display of a flick knife in a shop is the same. as
it was held in the case that by displaying a product is nothing more than an invitation to treat and it
is up to the 'would–be purchaser' to pick up the goods, in this case is the coin and bring it to the
cashier to make an offer as per the case of Pharmaceutical Society of Great Britain v. Boots Cash
Chemist. Hereby, it is a humble opinion that on the facts within the first paragraph, there was no
offer made in that instant.

The doctrine of privity, developed by the common law, worked before the 1999 Act. Cases such
as Tweddle v Atkinson, Dunlop v Selfridge, Beswick v Beswick clearly elucidate the above
statement. However, the doctrine of privity wasn't without its flaws for even though it provided
certainty, it led to socially unjustifiable results. The 1999 Act was passed to mitigate the harsh
results that the courts came to using the doctrine. The doctrine of privity operates to exclude
claims from third parties by emphasizing the lack of relationship between parties to a contract and
the third party. Under the doctrine, third parties neither have rights under the contract nor can rely
on exclusion clauses that the contract contains. Beswick v Beswick clearly demonstrates the
former by not allowing the plaintiff to bring a claim against the nephew for stopping payments he
promised under a contract with her husband (Courts came around the problem by holding her as
the administratrix of the estate). In Scruttons, the latter can be seen clearly as the stevedores were
not allowed to rely on the exclusion clause due to their third party status. Consideration, a core
doctrine in the law of contract, is intertwined with the doctrine of privity. A classic case that
demonstrates this link is the 1861 high court case of Tweddle v Atkinson, where a third party
beneficiary was unable to succeed in his claim due to him being a third party to the contract and
also, due to the lack of consideration from

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