Privity of Contract in UK Law

Leading Cases
  • Greene v Chelsea Borough Council
    • Court of Appeal
    • 30 Apr 1954

    During the Nineteenth Century there was a doctrine current in the law which I will call the "privity-of-contract"doctrine. In those days it was thought that if the Defendants became connected with the matter because of a contract he had made, then his obligations were to be measured by the contract and nothing else. He owed, it was said, no duty of care to anyone who was not a party to the contract.

  • Albazero, The (Albacruz)
    • House of Lords
    • 28 Jul 1976

    It has however been uniformly treated ever since by text-book writers of the highest authority, Abbott, Maude and Pollock, Blackburn and (implicitly) by Scrutton in each of its successive editions, as authority for the broad proposition that the consignor may recover substantial damages against the shipowner if there is privity of contract between him and the carrier for the carriage of goods; although, if the goods are not his property or at his risk, he will be accountable to the true owner for the proceeds of his judgment.

    The only way in which I find it possible to rationalise the rule in Dunlop v. Lambert so that it may fit into the pattern of the English law is to treat it as an application of the principle, accepted also in relation to policies of insurance upon goods, that in a commercial contract concerning goods where it is in the contemplation of the parties that the proprietary interests in the goods may be transferred from one owner to another after the contract has been entered into and before the breach which causes loss or damage to the goods, an original party to the contract, if such be the intention of them both, is to be treated in law as having entered into the contract for the benefit of all persons who have or may acquire an interest in the goods before they are lost or damaged, and is entitled to recover by way of damages for breach of contract the actual loss sustained by those for whose benefit the contract is entered into.

    The complications, anomalies and injustices that might arise from the co-existence in different parties of rights of suit to recover, under separate contracts of carriage which impose different obligations upon the parties to them, a loss which a party to one of those contracts alone has sustained, supply compelling reasons why the rule in Dunlop v. Lambert should not be extended to cases where there are two contracts with the carrier covering the same carriage and under one of them there is privity of contract between the person who actually sustains the loss and the carrier by whose breach of that contract it was caused.

  • White and Another v Jones and Another
    • House of Lords
    • 16 Feb 1995

    Although the categories of cases in which such special relationship can be held to exist are not closed, as yet only two categories have been identified, viz. (1) where there is a fiduciary relationship and (2) where the defendant has voluntarily answered a question or tenders skilled advice or services in circumstances where he knows or ought to know that an identified plaintiff will rely on his answers or advice.

  • Junior Books Ltd v Veitchi Company Ltd
    • House of Lords
    • 15 Jul 1982

    During the argument it was asked what the position would be in a case where there was a relevant exclusion clause in the main contract. My Lords, that question does not arise for decision in the instant appeal, but in principle I would venture the view that such a clause according to the manner in which it was worded might in some circumstances limit the duty of care just as in the Hedley Byrne case the plaintiffs were ultimately defeated by the defendants' disclaimer of responsibility.

  • London City Corporation v Fell and Others (Sub nom Herbert Duncan Ltd v Cluttons)
    • Court of Appeal (Civil Division)
    • 25 Nov 1992

    To what, in ordinary legal parlance, do we refer when we speak of a "tenancy"? I think that we refer to a particular legal relationship between tenant and landlord under which land is held by the one of the other. A "tenant", both by derivation and by usage, is someone who "holds" land of another, for which purpose it is immaterial whether he does so by contract or by estate.

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Legislation
  • Contracts (Rights of Third Parties) Act 1999
    • UK Non-devolved
    • January 01, 1999
    ....... SUMMARY . 3. The Act reforms the rule of ‘privity of contract’ under which a person can only enforce a contract if he is a party to it. The rule means that, even if a contract is made with the ......
  • Carriage of Goods by Sea Act 1971
    • UK Non-devolved
    • January 01, 1971
    ......shall be taken as applying anything in the Rules to any contract. for the carriage of goods by sea, unless the contract expressly. or by ... . . . b . ) Fire, unless caused by the actual fault or privity of the. carrier. . . . c . ) Perils, dangers and accidents of the sea ......
  • Merchant Shipping (Oil Pollution) Act 1971
    • UK Non-devolved
    • January 01, 1971
    ......occurred without his actual fault or privity— .   . ( a . ) section 503 of the   Merchant Shipping Act 1894 . ...the ship a contract of insurance or other security satisfying the. requirements of Article VII ......
  • Merchant Shipping (Liability of Shipowners and Others) Act 1958
    • UK Non-devolved
    • January 01, 1958
    ......with the ship under a contract of service with all or any of. the persons whose liabilities are limited ...notwithstanding his actual fault or privity in that. capacity, except in the cases mentioned in paragraph. (ii) of ......
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Books & Journal Articles
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Law Firm Commentaries
  • Recent Developments In Finance Litigation: Privity Of Contract Between Principal And Collecting Bank
    • Mondaq United Kingdom
  • Court of Appeal artfully navigates questions on agency and privity
    • JD Supra United Kingdom
    In Fairlight v Sotheby’s, the Court of Appeal considered whether a line of authorities relating to sub-agency could be applied to preclude privity of contract between the parties, and to excuse Fai...
    ...... v Sotheby’s, the Court of Appeal considered whether a line of authorities relating to sub-agency could be applied to preclude privity of contract between the parties, and to excuse Fairlight from returning proceeds received from the sale of a painting which had been rescinded on authenticity ......
  • You Can Lead a Horse to Water…
    • Mondaq United Kingdom
    ......The working party has recommended that the provisions of the Contracts (Rights of Third Parties) Act 1999 should be included in the JCT98, WCD98 ... May 2000, provides an exception to the basic legal doctrine of privity of contract i.e. that a contract cannot confer rights or impose ......
  • Leasehold Guarantees
    • Mondaq UK
    ...... this, otherwise the guarantor's liability will end when the contractual term ends. Sometimes a guarantee is being provided only because the ...This is known as privity of contract. The Landlord and Tenant (Covenants) Act 1995 (the "Act") ......
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