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LAW 447 (1)
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Department
Law
Course
LAW 447
Professor
Bruce Mac Dougall
Semester
Fall

Description
Lecture 7 – September 20 Privity of Contract - there are certain legislative regimes that abolish privity (Business Practices and Consumer Protection Act; PPSA in certain contexts) - The SGA doesn’t abolish privity There are two types of privity; horizontal and vertical - Horizontal privity, A + B have a contract, A not liable to C - Vertical privity, A + B and B + C have a contract then A is not liable to C Readings ch 3 + ch 4 (s.22 + 23) Lyons - Contract was between the mother and seller, the main damage to the child cannot be claimed in contract because the child was not a party to the contract Vertical privity Manufacturer  k retailer  k  consumer - The rights in personam at each level are different from each other - Ie. if the manufacturer sells to the retailer the in personam right can be ‘merchantable quality’; when you sell it further to someone else then the in personam right created is a newly created right even though it looks quite similar. The in rem right that is passed on is not new – the ownership is not new, it is passed on from person to person - However the consumer has acquired the rights of the retailer to sue the manufacturer – could acquire the rights, assignment of the in personam rights o In Quebec this happens automatically - There are two types of assignment, the common law assignment (now statute) and equitable assignment Privity in any event is a novel doctrine – this was about the same time the rules on consideration were confirmed (1840s). - The common law can do some work (Fraser River) – the SCC took steps to get around privity of contract – prof thinks this wasn’t a huge step, more like a baby step: this case was a LLC in the insurance contract that basically benefits the tortfeasor; the tortfeasor was using the LLC to protect itself – can you use a term in someone else’s contract to defend yourself from a claim by somebody who is actually a party to the contract o Relying on its earlier decision in London Drugs the court says yes you are allowed to use that defence even if you are not part of the contract – it is a very limited change to privity because it doesn’t let you use the LLC as a sword, just as a defence. Chabot - Number of tricks that the court did i
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