CLAW1001 Lecture Notes - Lecture 4: Dmg Media, Amusement Park, Newsprint
22 May 2018
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LECTURE 4
Privity of Contract
General Rule: Only the parties to a contract can acquire rights or incur liabilities under the
contract.
Tweddle v Atkinson [1861] 121 ER 762
William Tweddle became engaged to marry Miss Guy. The fathers of each of them entered
intoa contract under which each would pay William $100 after the wedding. Miss Guy’s
father died before paying the money. William sued the executor of Mr Guy’s deceased estate,
Mr Atkinson, for the money owed.
Held: William was not entitled to the money because he was not a party to the contract.
• Privity of Contract: Joint promises
Where a party is made to 2 or more persons jointly, if consideration is provided by one of the
promisees, the other promisee is still entitled to sue on the contract: Coulls v Bagot’s
Executor and Trustee Co Ltd [1967] 119 CLR 460
• Privity of Contract: Exceptions
1. Trust Exception: It is the beneficiary (rather than the trustee who holds property for the
beneficiary) who can sue and be sued on a contract
2. Agency Exception: It is the principle (rather than the agent who enters into the contract
on behalf of the principle) who can sue and be sued on a contract
3. Negligence towards 3rd party: Hill v Van Erp [1997] HCA 9
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
General rule: only the parties to a contract can acquire rights or incur liabilities under the contract. William tweddle became engaged to marry miss guy. The fathers of each of them entered intoa contract under which each would pay william after the wedding. Miss guy"s father died before paying the money. William sued the executor of mr guy"s deceased estate, Held: william was not entitled to the money because he was not a party to the contract: privity of contract: joint promises. Where a party is made to 2 or more persons jointly, if consideration is provided by one of the promisees, the other promisee is still entitled to sue on the contract: coulls v bagot"s. Innocent party can affirm the contract and claim damages or can terminate the contract and claim damages. Innocent party can claim damages only (cannot terminate contract so must still perform any remaining obligations) Associated newspapers ltd v bancks [1951] 83 clr 322.
