Law of Contract II: Privity of Contract

Vocabulary-style flashcards covering the doctrine of privity of contract, English common law precedents, judicial/legislative reforms, and the Ghanaian legal position as outlined in the lecture notes.

Privity of Contract

A principle providing that a contract cannot confer rights or impose obligations upon any person who is not a party to the contract.

Doctrine of Consideration

The legal principle that privity entails and reinforces, stating that consideration must move from the promisee.

Tweddle v. Atkinson [1861-73]

Case establishing that no stranger to consideration can take advantage of a contract made for his benefit, because consideration must move from the promisee.

Dunlop v. Selfridge [1915]

House of Lords case reaffirming that only a party to a contract can enforce its terms, preventing a manufacturer from suing a sub-dealer for selling below list price.

Scruttons Ltd v Midland Silicones Ltd [1962]

Case where a stevedore could not rely on a limitation clause in a bill of lading because no contract existed between them and the cargo owner.

Darlington v. Wiltshier [1995]

Case where the court recognized trust and agency devices to allow a Council to recover damages despite a lack of direct privity.

Beswick v. Beswick [1968]

Case where a widow could not enforce a contract personally as a third party but succeeded in obtaining specific performance in her capacity as administratrix of the estate.

Contracts (Rights of Third Parties) Act 1999

UK legislation that permits contracting parties to confer enforceable rights on third parties if the contract expressly provides for it or purports to confer a benefit.

Avraamides v Colwill [2006]

Ruling that third-party identification under the 1999 Act must be specific and express, ruling out identification by construction or inference.

Tulk v. Moxhay (1848)

Case establishing that in equity, restrictive covenants can bind third parties in land contracts beyond mere notice.

De Mattos v. Gibson (1858)

Reaffirmed the principle that a mortgagee of a ship is bound to respect the pre-existing rights of a charterer of which he has notice.

Undisclosed Principal

A qualification to privity where a third party can intervene if they can show the original contracting party was acting as their agent at all material times.

Assignment

A process where a party transfers their contractual rights to an assignee, allowing the assignee to sue as a third party.

Section 5(1) of the Contracts Act, 1960 (Act 25)

Ghanaian law stating that a contract provision purporting to confer a benefit on a non-party (designated or as a class) may be enforced by that person as if they were a party.

Neoplan (Gh) Ltd v Harmony Construction Ltd. [1995-96]

Ghanaian case holding that a warranty cannot be enforced against a party without proof of an existing contract to which they were a party.

Koah v Royal Exchange Assurance [1976]

Ghanaian case where a driver could not take advantage of Section 5(1) because the insurance policy terms did not confer a benefit upon him.

Public Policy (Third Party Intervention)

Ghanaian legal ground permitting a third party directly affected by a contract to intervene to have it declared void or unenforceable.

Nartey-Tokoli v VALCO [1987-88]

Case where a Leave of Absence (LOA) programme was held a nullity because the official representative (ICU) was not a party to the negotiations conducted by the local union.