Privity

Front 1

Shanklin v Detel

Back 1

Generally, a 3P who is not privy to the Ct and has not provided consideration for the promise cannot sue the Sor under the Ct.

BUT can sue Sor if a collateral Ct is found between 3P and Sor, and 3P gave consideration.

Front 2

Coulls v Bagot's

Back 2

Privity issue may be avoided where there were joint promisees who had furnished consideration on behalf of them all. (No need to furnish consideration separately)

Front 3

Beswick v Beswick

Back 3

See can sue Sor (no privity issue).

But if Ct meant to benefit 3P, See may end up with only nominal dmgs. However, court may order specific performance if dmgs are unjustly inadequate.

Front 4

Alfred McAlpine v Panatown

Back 4

Generally, a See cannot sue and recover dmgs in respect of 3P's loss. He can only recover dmgs for his own loss.

Exceptions to this general rule are the "broad ground" and the "narrow ground".

Allowing See to claim on broad ground is premised on protecting his performance interest.

Allowing See to claim on narrow ground is essentially using the Albazero exception. But this is contingent on existence of legal blackhole. Hence if no LBH, operation of Albazero exception is precluded. Thus, conferment of Ctual right of action on 3P will take away right of See to recover dmgs on narrow ground. (Such was the case here)

Front 5

The Albazero

Linden Gardens

Chia Kok Leong v Prosperland

Back 5

Narrow ground: Where the parties had contemplated that the proprietary interests in the goods may be transferred from one owner to another after the Ct had been entered into and before the breach which caused loss or damage to the goods, the Sor is considered to have entered into the Ct for the benefit of all persons who had or may acquire an interest in the gds before they are lost or damaged, and is entitled to recover by way of dmgs for breach of Ct the actual loss sustained by the intended beneficiaries.

But for narrow ground to be available, the 3P must not have had its own cause of action in Ct law.

Front 6

Chia Kok Leong v Prosperland

Back 6

3P's possible claim in tort does not preclude See's claim on the narrow ground. (Only express Ctual right can preclude)

Broad ground accepted in SG:

Claim in broad ground more consistent with principle. Just that possible problem of double liability. But DL more apparent than real; court can stay See's action until satisfied that 3P is content to allow claim to be discharged by payment to the employer.

Front 7

Re Schebsman

Back 7

If Sor willing to pay 3P, See cannot instruct Sor to pay him instead. UNLESS Ct gives See right to do so.

Together, Sor and See can vary the Ct without 3P's consent unless a trust of the promise has been created (i.e. where See holds Ctual right on 3P's behalf). A trust will only be made out where intention to create it is clearly evident from language used and case circumstances.

Front 8

Scruttons v Midland Silicones

The Eurymedon

R v Clarke

Burke v Mersey Docks

Back 8

Generally, 3P cannot rely on exemption clause. But 3P may have a separate Ct (which also has the EC) with Sor if:

1) Ct makes it clear that 3P was intended to be protected,

2) Ct makes it clear that See was also Cting as agent for 3P,

3) See has authority from 3P to do 2), or 3P later ratifies

And 4) 3P provides consideration.

But usually difficult to find consideration. (Court in Eurymedon adopted unilateral Ct analysis: Sor's signing of bill of lading was an offer to the world which included EC, this offer was accepted by stevedores upon unloading of gds. Thus stevedores provided consideration in performing existing Ctual duty. This was valid because perf of Ctual duty owed to a 3P is still good consideration. - Shadwell v Shadwell)

But difficulties:

Tough to identify existence of offer of immunity by consignor.

3P may not be aware of offer. Act done in ignorance of offer generally not valid. (R v Clarke)

No protection for 3P if gds damaged before 3P undertakes task set out in main Ct. (Also applies to bilateral) (Burke)

Front 9

The New York Star

Back 9

Rejected unilateral contract analysis in The Eurymedon; found that a bilateral contract could be made out. Sor consignor and the 3P stevedores were ad idem through the See carrier's agency upon Sor's acceptance of bill of lading. (Carrier as 3P's authorised agent)

But difficult to ascertain precise moment that Ct was concluded.

Front 10

Norwich v Harvey

Back 10

Ct can negate DOC that would otherwise have been owed by 3P to the Sor. This does not concern privity because it is not about the finding of a Ct, but about the common understanding amongst the parties about risk allocation.

Front 11

Gore v Van der Lann

Snelling v Snelling

Back 11

Where a Sor promises a See that he will not sue a 3P, privity doctrine mandates that 3P has no right to enf this promise. But See may be able to apply for stay of proceedings if he can demonstrate that 1) Sor has promised not to sue 3P and 2) See has sufficient interest in enforcement of promise.

Front 12

Morris v Martin

Affirmed in The Pioneer Container

Back 12

Generally, parties cannot impose a burden on a 3P to do something, or deprive a 3P of some right/restrict his freedom of action.

But in bailment situations, the 3P owner is bound by the conditions if he has expressly or impliedly consented to the bailee making a sub-bailment containing those conditions, but not otherwise.

Front 13

Tweddle v Atkinson, Dunlop v Selfridge

Back 13

Parties are not entitled to or bound by the terms of a Ct to which they are not an original party. Benefit limb: Such 3Ps cannot enforce rights/obligations under the Ct, even if made for their benefit. Burden limb: 3Ps cannot be burdened by obligations under the Ct.