Beruflich Dokumente
Kultur Dokumente
CONTRACT
LAW OF CONTRACT II
Outline
1) Autonomy
2) Mutuality of rights
The doctrine of privity is also justified by the argument that
since the third party provides nothing in return for the
promised benefit and cannot be liable for breach of
contracts; it is inequitable to give the third party the right to
sue upon the contract.
3) Indeterminate range of liability
If such broad liability to a third party could be created by
contracts, then this would certainly discourage entry into
transactions, with the consequence of serious harm to the
whole market system for the creation of wealth. In
discussing the role of mutuality of rights, it was argued that
the real issue is whether the
Promisor should answer to the third party. It must be
remembered that the promisor has agreed to benefit the
third party at the time of the formation of contract.
A. Privity of Contract under
common lawTweddle v. Atkinson
Case:
The plaintiff was the son of John Tweddle. He married
the daughter of William Guy. After the marriage,
Wiliam Guy and John Tweddle entered into an
agreement whereby they mutually agreed to pay 200
and 100 respectively to the plaintiff. The sum
promised by William Guy remained unpaid and the
plaintiff sued for it.