On the Privity Rule

On the Privity Rule.

Its misuse in disputes under contract law.

The original case  it derives from...

This section is a result of a dispute in 2004 by the author, with a company in the UK and

it remains a matter of pride, that the British Legal system, with all its faults of which there are many, is one where the argument:

"Might's not right, where argument's not treason,

Treason's his who's Might, denies good reason."

as you have seen elsewhere in the poetry section, means that logical arguments (when they get heard) does not bear the consequence of the death penalty – unless that is: when errant peccant councils, abuse their powers and take people to the ends of the earth for £50 breaking every statute in the book and end up caught in court, and lose £4000 for the disgraceful lies they told.This is what some people do, when at the end of their tether..

Queen's Guard committed suicide here, and Council worker also for the immoral conduct we are surrounded with.

Winter stood up to them. Here...

1. THE BASIC RULE: Put simply, the privity rule means that only a person who is a party to a contract can enforce rights under it (the benefit) or be adversely affected by it (the burden).

The doctrine of privity of contract developed in the nineteenth century as a corollary of the bargain theory of contract.,Contractual benefits and burdens could only be conferred on a person who provided some consideration. The doctrine of privity of contract acts as a boundary mark for the law of contract, preventing contractual obligations from spreading beyond the contractual bond.

This privity rule has given many problems to legal professionals for 140 years until the Law Commission revised it, under the “Contracts (Rights of Third Parties) Act 1999 (c. 31)”

Winter didn't need the changes, he simply used logic in a 3-5 minute argument, to take the obverse rule and that argument brought the solicitor to tears, and the Judge went off to seek advice, returning to say “you are right” I will give this a two and half hours hearing. The defendant lost their costs of £1200 for defending £8, being called

“deplorably opportunistic”

2. THE BASIC RULE ABUSED: Only a person who is a party to a contract can enforce rights under it! The implication in this abuse is that the power of enforcement springs from only the contract. If you did not sign it you are not a party to it. This 'suppressio veri" "suggestion falsi" (see elsewhere on the logic section of this site) is the abuse Few people would normally think of enforcing a contract unless they have some proximity to its impact on their lives, and this would usually be restricted to their proximity being that of class membership as a third party to it. For example the relationship

between a seller, carrier and buyer, where the seller and carrier have co-signed a contract, and the essence of that contract implies there must be in existence athird party; you the buyer or consumer, for it to function properly.

There will be an expose of the application of 2. above, as used in 2004, against this author as a buyer where the carrier also relied on the asymmetry of knowledge between their solicitor and the lay customer, to retain a revenue of £15.28 advantage; despite their MONEY BACK GUARANTEE, and dispose of the buyer quickly and without cost. This is an act that 'blurs the grace and blush of modesty, and sets a blister', (iii)** where "noblesse oblige" resides. The defendant's first argument, a fallacy called the 'appeal to authority' is better expressed I think in Shakespeaare's:

"For my authority bears of a credent bulk,That no particular scandal once can touch But it confounds the breather. (iv)**

The father case; TWEDDLE v ATKINSON (1861)1 B & S 393, below (i)** was relied on in court by this author on 3rd August 2005. The application to dismiss the claimant's case was before the judge and the claimant stated simply, that "the reason for the failure of the case in 1861, was the absence of 'consideration' (money or some other benefit), therefore the presence of consideration, which is declared as received by the defendant in their defence, makes the claim enforceable."

The 1861 Tweddle V Atkinson application was dismissed on absence of consideration, my claim had presence of consideration and proof of its moves. Hence it was allowed.....

This is derived from the principle of necessary and sufficient conditions in determination of simple causes. To place this argument into a frame where an analogy with a law of nature; by way of the laws of logic; being perhaps even more powerful, will be easily understood in the example:

"Oxygen is necessary for life if and only if the absence of oxygen is sufficient to extinguish life." This is an extremely simple example, that could be initially qualified with the terms "for specific species, under specific circumstances"

Transposing the analogy produces; if consideration is one of the necessary conditions then, "Consideration is necessaryfor an enforceable contract, if and only if the absence of consideration is sufficient to make a contract unenforceable." Appropriate qualifications like promisors and promisee may be added to render the details more specific. The conditional, if andonly if, is the material implicative function that binds the nomic relationship.

While this relates to nomic relationships; sense 2 OED (ii), in laws of logic and nature, one can easily see why the privity rule; as drawn from bargain theory, was constructed to be sufficient for the 'failure to enforce' in TWEDDLE v ATKINSON (1861) and by material implication the converse (presence of consideration) would make the judgement enforceable.

The deeper logic here is: presence or absence as expressed in more formal notation P or ~P ( 'P' or not 'P') as shown in the earlier short treatise on "hunt the proposition" on this website. The laws of logic applied here make any argument concerning the absence (~P) of consideration, focus on the first disjunct (P) which is presence. The sufficient condition is the more powerful element, since; in the argument above, Calcium or Magnesium may also be necessary for life, but not sufficient for the absence of it except over a long period of time. Here the primary sufficient condition was consideration; as was oxygen. Bear in mind that one disconfirming instance in the entire set of confirming instance, is catastrophic for the principle. One disconfirming instance of life without oxygen means either the rule is invalid in nature or not universal, and requires modification to a defined species of life to remain a simple cause.

Thus, finding a dispute in common law precedent where a promisee provided consideration to a promisor and the relationship did NOT constitute an enforcable contract will I suggest be an impossible task. If one should be found, then the privity rule is actually in contradiction with itself and subject to the LAW OF NON CONTRADICTION. Which is simply expressed in the notation ~(P . ~P) (Not the case that P and Not P are true together). That is what makes the rule into a law of logic. These laws are true in all space and all time, and all universes. They are the primary elements of Certain Knowledge, as opposed to Belief, which is why the author always prefers logic and truth, to rhetoric and proof:

'Truth, the Whole truth and Nothing but..', is best,

While 'Truth and Nothing but..', leaves out the rest. "

From the poetry section. Truth as defined in Aristotle (v) **

Even where 'absence of evidence is not evidence of absence', the ring of truth can prevail, and any experienced judge of persons will instinctively KNOW this. If not then they must resort to the polygraph, or even more promising, the brain fingerprinting techniques now being researched by Dr .L. A. Farwell in the USA. Proof, while necessary in a court of law, needs to be sensitively combined with the behavioural sciences of body movement, also understood instinctively, as well as a good look at the eyes, "The window to the soul.": Wittgenstein. If that is not used, then the "mind's eye" (Hamlet) is even superior, where logic is applied as a filter to the data input to the stream of consciousness. The use of logic combined with the latter, actually can be startling sometimes. Just as one knows the form of a predictable event, like the bending of a clear plastic ruler, leads to the eventual opaqueness developing at the juncture of a breach, then as predicted it snaps. Linguistic exchanges of a social nature; being easier, have a form that can result in a sense of foreknowledge to the next response of ones interlocutor.

Certain Knowledge; existing as universals that are essentially tautologies as opposed to beliefs, is the basis from which most if not all scientific constructs and methodologies should flow, The Cartesian proposition "Cogito ergo sum;" I think therefore I am, is at the boundary of certain and uncertain knowledge which then slopes in to the Platonic lower areas of Belief. The Cartesian proposition is not even defeated by the 'clever devil principle', where hallucinatory perception might be the foundation of false data n the percepts' stream of consciousness. One has to exist in order to have perceptions of such magnitude where the entire set of presented data may be false, thinking about it is a necessary condition of cognitive existence. This may be subject to controversy, but that hopefully is explained in the section relating to "Is existence a predicate?" where matters concerning the ontological and cosmological arguments for the existence of God are presented.

Of course the privity rule constructed by three judges in 1861, is fallible as a rule, and may be subject to changing customs in human behaviour, just as flux in the laws of nature, revealed in the phrase from antiquity, "One cannot step into the same stream of water twice." However the rule has been fixed in the 'firmament' as a precedent or frame of reference, and until removed or reformed; as in the Contracts (Rights of third Parties act) 1999, remains a rule many parties to a contract will rely on to prevent the impact of contracts spreading beyond the parties or class members of its express or implied terms.

The moral; for direct or third parties, would be to simply provide sufficient consideration as a promisee to one or both promisors, and then become a party to the contract in question. Nothing prevented Tweddle Junior giving £5 to each parent, and writing that into the contract. The fathers if necessary could provide that same amount of money as another gift outside the contract. Clearly this first test was an unknown rule until created, perhaps quite fallaciously, since theere was nothing unfair in its terms, except perhaps to the family Atkinson, when his will and testament was read.

_________________________

(i)** TWEDDLE v ATKINSON (1861)1 B & S 393 is usually cited as the prime case which first

established the doctrine of privity of contract as part of English law. In reality the rule that consideration must move from the promisee is similar to, perhaps identical to, the privity rule...

It demonstrates some of the issues associated with privity and consideration in contracts.

Tweddle's father (whom I'll call Tweddle senior), and Atkinson -- Tweddle's father in law -- contracted to contribute a sum of money each to the support of Tweddle and his wife. Tweddle senior kept up his part of the bargain, but Atkinson died before paying anything. Tweddle sued the executors of Atkinson's estate. His suit was rejected because he himself was not party to the contract, even though it was for his benefit (see: Privity Of Contract). It is not possible to claim that there is an implicit contract between Tweddle (junior) and Atkinson, because there is no consideration from Tweddle to Atkinson.

It seems likely that Tweddle senior could have enforced the contract at law (though he did not), because the basic requirements of a contract were fulfilled. The consideration in this case would be that Tweddle senior accepted a detriment at the request of Atkinson, rather than the Tweddle senior gave some benefit to Atkinson.

Alternate description from London University coursework.

William Tweddle, the son of John Tweddle, married the daughter of William Guy.The two fathers made an agreement with each other to give young Tweddle a sum of money on the marriage. Guysubsequently died so when the money was not paid William Tweddle sued Atkinson, who was Guy’s executor. The

agreement between the fathers expressly provided that William Tweddle ‘has full power to sue the said parties in any Court of law or equity for the aforesaid sums hereby promised and specified’. The three judges were unanimous that William Tweddle had given no consideration for the agreement which

was, after all, between the fathers and they gave him short shrift, not even troubling counsel for the executor, so apparently weak was the new husband’s argument. This seems to ignore the fact that young Tweddle had married Guy’s daughter and, even if she were a great beauty so that he suffered no detriment, the entry into marriage might have been perceived by a more sympathetic tribunal as

consideration, with William Tweddle taking Guy’s daughter off his hands. Although consideration must move from the promisee, it need not move to the promisor.

(ii)** Nomic, That pertains to or is concerned with a discoverable scientific or logical law.

Notes from case:

(iii) ** Measure for Measure: iv, iv: 26

(iv) ** Hamlet: iii, iv: 41

(v) ** Aristotle "To say of what is, that it is, or of what is not, that it is not, is true." Metaphysics (Book 4)

and its converse "To say of what is, that it is not, or of what is not, that it is, is false

Notes from Philosophy:

Culpability is a function of 1) the harm one does, and 2) the responsibility one has in the act of 'intending negligence' as opposed to simple negligence. Understanding the defendant's teleology, the claimant was able to predict precisely this tortious willful negligence, at first sight of their filed allocation questionnaire on 22nd April 2005, being a construct of delay and intended breach; not merely to the claimant, but towards the court.

Privity of contractFrom Wikipedia, the free encyclopedia

Contract law

Part of the common law series

Contract formation

Offer and acceptance · Mailbox rule

Mirror image rule · Invitation to treat

Firm offer · Consideration

Defenses against formation

Lack of capacity

Duress · Undue influence

Illusory promise · Statute of frauds

Non est factum

Contract interpretation

Parol evidence rule

Contract of adhesion

Integration clause

Contra proferentem

Excuses for non-performance

Mistake · Misrepresentation

Frustration of purpose · Impossibility

Impracticability · Illegality

Unclean hands · Unconscionability

Accord and satisfaction

Rights of third parties

Privity of contract

Assignment · Delegation

Novation · Third party beneficiary

Breach of contract

Anticipatory repudiation · Cover

Exclusion clause · Efficient breach

Deviation · Fundamental breach

Remedies

Specific performance

Liquidated damages

Penal damages · Rescission

Quasi-contractual obligations

Promissory estoppel

Quantum meruit

Related areas of law

Conflict of laws · Commercial law

Other common law areas

Tort law · Property law

Wills, trusts and estates

Criminal law · Evidence

v · d · e

The doctrine of privity in the common law of contract provides that a contract cannot confer rights or impose

obligations arising under it on any person or agent except the parties to it.

The premise is that only parties to contracts should be able to sue to enforce their rights or claim damages as such.

However, the doctrine has proven problematic due to its implications upon contracts made for the benefit of third

parties who are unable to enforce the obligations of the contracting parties.

Contents

 [hide]

1 Third-party rights

2 History

3 Exceptions

o 3.1 Common law exceptions

o 3.2 Statutory exceptions

o 3.3 Third-party beneficiaries

4 See also

5 References

[edit]Third-party rights

Privity of contract occurs only between the parties to the contract, most commonly contract of sale of goods or

services. Horizontal privity arises when the benefits from a contract are to be given to a third party. Vertical privity

involves a contract between two parties, with an independent contract between one of the parties and another

individual or company.

If a third party gets a benefit under a contract, it does not have the right to go against the parties to the contract

beyond its entitlement to a benefit. An example of this occurs when a manufacturer sells a product to a distributor and

the distributor sells the product to a retailer. The retailer then sells the product to a consumer. There is no privity of

contract between the manufacturer and the consumer.

This, however, does not mean that the parties do not have another form of action e.g. Donoghue v. Stevenson  – here

a friend of Ms. Donoghue bought her a bottle of ginger beer, which was defective. Specifically, the ginger beer

contained the partially decomposed remains of a snail. Since the contract was between her friend and the shop

owner, Mrs. Donoghue could not sue under the contract, but it was established that the manufacturer has a duty of

care owed to their consumers and she was awarded damages in tort.

Privity is the legal term for a close, mutual, or successive relationship to the same right of property or the power to

enforce a promise or warranty.

[edit]History

Prior to 1861 there existed decisions in English Law allowing provisions of a contract to be enforced by persons not

party to it, usually relatives of a promisee, and decisions disallowing third party rights[1][2]. The doctrine of privity

emerged alongside the doctrine of consideration, the rules of which state that consideration must move from the

promisee. That is to say that if nothing is given for the promise of something to be given in return, that promise is not

legally binding unless promised as a deed. 1833 saw the case of Price v. Easton, where a contract was made for

work to be done in exchange for payment to a third party. When the third party attempted to sue for the payment, he

was held to be not privy to the contract, and so his claim failed. This was fully linked to the doctrine of consideration,

and established as such, with the more famous case of Tweddle v. Atkinson . In this case the plaintiff was unable to

sue the executor of his father-in-law, who had promised to the plaintiff's father to make payment to the plaintiff,

because he had not provided any consideration to the contract.

1. ̂  [www.lawcom.gov.uk/docs/lc242.pdf Privity of Contracts: Contracts for the benefits of

third parties], Law Commission, LC242

2. ̂  Drive Yourself Hire Co (London) v Strutt, 1 Q.B. 250 (1954).

The doctrine was developed further in Dunlop Pneumatic Tyre v. Selfridge and Co. Ltd. through the judgment of Lord

Haldane.

Privity of Contract played a key role in the development of negligence as well. In the first case of Winterbottom v.

Wright (1842), in which Winterbottom, a postal service wagon driver, was injured due to a faulty wheel, attempted to

sue the manufacturer Wright for his injuries. The courts however decided that there was no privity of contract

between manufacturer and consumer.

This issue appeared repeatedly until MacPherson v. Buick Motor Co.  (1916), a case analogous to Winterbottom v

Wright involving a car's defective wheel. Judge Cardozo, writing for the New York Court of Appeals, decided that no

privity is required when the manufacturer knows the product is probably dangerous if defective, third parties (e.g.

consumers) will be harmed because of said defect, and there was no further testing after initial sale. Foreseeable

injuries occurred from foreseeable uses. Cardozo's innovation was to decide that the basis for the claim was that it

was a tort not a breach of contract. In this way he finessed the problems caused by the doctrine of privity in a modern

industrial society. Although his opinion was only law in New York State, the solution he advanced was widely

accepted elsewhere.

[edit]Exceptions

[edit]Common law exceptions

There are exceptions to the general rule, allowing rights to third parties and some impositions of obligations. These

are:

Collateral Contracts (between the third party and one of the contracting parties)

Trusts  (the beneficiary of a trust may sue the trustee to carry out the contract)

Land Law (restrictive covenants on land are imposed upon subsequent

purchasers if the covenant benefits neighbouring land)

Agency and the assignment of contractual rights are permitted.

Third-party insurance .a third party may claim under an insurance policy made for

their benefit, even though that party did not pay the premiums.

Contracts for the benefit of a group  where a contract to supply a service is made in

one person's name but is intended to sue at common law if the contract is

breached; there is no privity of contract between them and the supplier of the

service.

Attempts have been made to evade the doctrine by implying trusts (with varying success), constructing the Law of

Property Act 1925 s. 56(1) to read the words "other property" as including contractual rights, and applying the

concept of restrictive covenants to property other than real property (without success).

[edit]Statutory exceptions

The Contracts (Rights of Third Parties) Act 1999 now provides some reform for this area of law which has been

criticised by judges such as Lord Denning and academics as unfair in places. The act states:

1. - (1) Subject to the provisions of this Act, a person who is not a party to a contract (a "third party") may in his own

right enforce a term of the contract if-

(a) the contract expressly provides that he may, or

(b) subject to subsection (2), the term purports to confer a benefit on him.

(2) Subsection (1)(b) does not apply if on a proper construction of the contract it appears that the parties did not

intend the term to be enforceable by the third party.

This means that a person who is named in the contract as a person authorised to enforce the contract or a person

receiving a benefit from the contract may enforce the contract unless it appears that the parties intended that he may

not.

The Act enables the aim of the parties to be fully adhered to. Taking the situation in Beswick v Beswick whereby the

only reason why Mr Beswick and his nephew contracted was for the benefit of Mrs Beswick. Under the Act Mrs

Beswick would be able to enforce the performance of the contract in her own right. Therefore, the Act realises the

intentions of the parties.

The law has been welcomed by many as a relief from the strictness of the doctrine, however it may still prove

ineffective in professionally drafted documents, as the provisions of this statute may be expressly excluded by the

draftsmen.

[edit]Third-party beneficiaries

In Australia, it has been held that third-party beneficiaries may uphold a promise made for its benefit in a contract of

insurance to which it is not a party (Trident General Insurance Co Ltd v. McNiece Bros Pty Ltd(1988) 165 CLR 107). It

is important to note that the decision in Trident had no clear ratio, and did not create a general exemption to the

doctrine of privity in Australia.

Queensland, the Northern Territory and Western Australia have all enacted statutory provisions to enable third party

beneficiaries to enforce contracts, and limited the ability of contracting parties to vary the contract after the third party

has relied on it. In addition, section 48 of the Insurance Contracts Act 1984 (Cth) allows third-party beneficiaries to

enforce contracts of insurance.

Although damages are the usual remedy for the breach of a contract for the benefit of a third party, if damages are

inadequate, specific performance may be granted (Beswick v. Beswick  [1968] AC 59).

The issue of third-party beneficiaries has appeared in cases where a stevedore has claimed it is covered under the

exclusion clauses in a bill of lading. In order for this to succeed, four factors must be made out:

The bill of lading must clearly intend to benefit the third party.

It is clear that when the carrier contracts with the consignor, it also contracts as

an agent of the stevedore.

The carrier must have had authority by the stevedores to act on its behalf, or the

stevedores must later endorse the actions of the carrier.

Any difficulties with consideration moving from the stevedores must be made out.

The last issue was explored in New Zealand Shipping Co Ltd v. A M Satterthwaite & Co Ltd [1975] AC 154, where it

was held that the stevedores had provided consideration for the benefit of the exclusion clause by the discharge of

goods from the ship.

New Zealand has enacted the Contracts Privity Act 1982, which enables third parties to sue if they sufficiently

identified as beneficiaries by the contract, and in the contract it is expressed or implied they should be able to enforce

this benefit.

[edit]See also

Consumer protection

Privity of estate

Privity in English law

[edit]References

Official text of the Contracts (Rights of Third Parties) Act 1999  as amended and in

force today within the United Kingdom, from the UK Statute Law Database

Official text of the Contracts (Rights of Third Parties) Act 1999  as originally

enacted within the United Kingdom, from the UK Statute Law Database

Official text of the Contracts (Rights of Third Parties) Act 1999  Explanatory Notes,

from the UK Statute Law Database

Beatson, J, Q.C. (1998). Anson's Law of Contract (27th Ed.). Oxford University

Press ISBN 0-19-825262-5

Categories: Common law | Contract law | English law | Legal doctrines and principles

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Donoghue v StevensonFrom Wikipedia, the free encyclopedia

Donoghue v Stevenson

Court House of Lords

Full case name M’Alister (or Donoghue) (Pauper) v Stevenson

Date decided 26 May 1932

Citation(s) [1932] UKHL 100, 1932 SC 31, [1932] AC 562, [1932] All ER Rep

1

Judge(s)

sitting

Lords Buckmaster, Atkin, Tomlin,Thankerton and Macmillan

Donoghue v Stevenson [1932] UKHL 100[1] was a decision of the House of Lords that established

the modern concept of negligence in Scots law and English law, by setting out general principles

whereby one person would owe another person a duty of care. It is the origin of the modern law

of delict in Scots law and the tort ofnegligence in English and Welsh law as well as in many

other Common Law jurisdictions.

The case originated in Paisley, Renfrewshire and is therefore an authority principally in Scots law,

but the House of Lords determined that the English law of negligence and the Scots law of delict

were identical. Donoghue v Stevenson is often referred to as the "Paisley snail" or the "snail in the bottle" case, and is one of the most famous decisions in British legal history.

Contents

 [hide]

1 Facts

o 1.1 Legal background

o 1.2 Progress of the case

2 Judgment

3 Significance

4 See also

5 Notes

6 References

7 External links

[edit]Facts

Memorial to the case in Paisley, unveiled by Lord Mackay of Clashfern and legal figures from around the Commonwealth in 1990

On the evening of Sunday 26 August 1928 May Donoghue, née M’Alister, boarded a tram in

Glasgow for the thirty-minute journey to Paisley. At around ten minutes to nine, she and a friend took

their seats in the Wellmeadow Café in the town's Wellmeadow Place. They were approached by the

café owner, Francis Minchella, and Donoghue's friend ordered and paid for a pear and ice and

an ice-cream drink. The owner brought the order and poured part of an opaque bottle of ginger

beer into a tumbler containing ice cream. Donoghue drank some of the contents and her friend lifted

the bottle to pour the remainder of the ginger beer into the tumbler. It was claimed that the remains

of a snail in a state of decomposition dropped out of the bottle into the tumbler. Donoghue later

complained of stomach pain and her doctor diagnosed her as having gastroenteritis and being in a

state of severe shock.

On 9 April 1929, Donoghue brought an action against David Stevenson, an aerated

water manufacturer in Paisley, in which she claimed £500 as damages for injuries sustained by her

through drinking ginger beer which had been manufactured by him. Following the House of Lords

judgement, which dealt with a preliminary matter, the case was settled out of court and so the full

facts were not heard in court. The identity of Donoghue's friend is unknown, but that person is

referred to as "she" in the case reports (including the first paragraph of the judgement of Lord

Macmillan in the House of Lords). Other factual uncertainties include whether the animal (if it

existed) was a snail or a slug, whether the bottle contained ginger beer or some other beverage (as

'ginger' in Glaswegian and West of Scotland parlance refers to any fizzy drink) and whether the drink

was part of an ice-cream soda.

[edit]Legal background

In common law, a person can claim damages from another person where that other person owed the

first person a duty of care and harmed that person through their conduct in breach of that duty. This

concept existed prior to Donoghue, but it was generally held that a duty of care was only owed in

very specific circumstances, such as where a contract existed between two parties or where a

manufacturer was making inherently dangerous products or was acting fraudulently.[2]

There was no contractual relationship between Donoghue and the drinks manufacturer or even the

café owner, as Donoghue had not ordered or paid for the drink herself. Although there was a

contractual relationship between the café owner and Donoghue's friend, the friend had not been

harmed by the ginger beer. As ginger beer was not a dangerous product, and the manufacturer had

not fraudulently misrepresented it, the case also fell outside the scope of the established cases on

product liability. On the face of it, the law therefore did not provide a remedy for Donoghue.

Donoghue's solicitor, Walter Leechman of W G Leechman & Co in Glasgow's West George Street,

had already tried to establish liability against aerated water manufacturer A. G. Barr when a dead

mouse was alleged to have found its way into a bottle of its ginger beer. However, an action for

damages was rejected by the Inner House of the Court of Session, when the appeal court judges

ruled that there was no legal authority allowing such an action.[3]

[edit]Progress of the case

The writ lodged in the Court of Session on April 1929 alleged that May Donoghue had become ill

with nervous shock and gastroenteritis after drinking part of the contents of an opaque bottle of

ginger beer, and David Stevenson, the manufacturer, "owed her a duty to take reasonable care that

ginger beer he manufactured, bottled, labelled and sealed, and invited her to buy, did not contain

substances likely to cause her injury." Donoghue claimed damages of £500.

Counsel for the manufacturer denied that any such duty was owed but, in June 1930, the judge Lord

Moncrieff ruled there was a case to answer. Stevenson appealed the ruling on a number of legal

grounds, and the judges of the Inner House granted the appeal in November 1930, dismissing

Donoghue's claim as having no legal basis following the authority of their earlier decision in Mullen v

AG Barr. One of the judges said that "the only difference between Donoghue's case and the mouse

cases was the difference between a rodent and a gastropod and in Scots law that meant no

difference at all."

Donoghue was allowed to appeal her case to the House of Lords but, whilst her legal team had

agreed to provide their services free, she was unable to put up the security needed to ensure the

other side's costs were met should she lose in the Lords. However, as such security would not be

required if she could gain the status of a pauper, she petitioned the House of Lords, saying, "I am

very poor and am not worth in all the world the sum of five pounds, my wearing apparel and the

subject matter of the said appeal...". A certificate of poverty signed by a minister and two elders of

her church was attached to the petition, and the House of Lords agreed to grant her pauper status.

Nine months after her petition was

granted, Lords Buckmaster, Atkin, Tomlin, Thankerton and Macmillan heard counsels' arguments.

Donoghue's counsel - George Morton KC and W. R. Milligan (later a Lord Advocate) - argued that a

manufacturer who puts a product intended for human consumption onto the market in a form that

precludes examination before its use is liable for any damage caused if he fails to exercise

reasonable care to ensure it is fit for human consumption. Stevenson's counsel - W. G. Normand

KC (then Solicitor General for Scotland and later a Law Lord), J.L. Clyde (later Lord Advocate and

then Lord President of the Court of Session), and T. Elder Jones - argued that there was no authority

for such a principle of law.

[edit]Judgment

The leading judgment was delivered on 26 May 1932 by Lord Atkin. The most famous section was

his explanation of the "neighbour" principle, which was derived from the Christian principle of "loving

your neighbour" (found, for example, in James 2:8[4] and the Parable of the Good Samaritan):

There must be, and is, some general conception of relations giving rise to a duty of care, of which the particular cases found in the

books are but instances. ...The rule that you are to love your neighbour becomes in law you must not injure your neighbour; and the

lawyer's question: Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions

which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law, is my neighbour? The answer

seems to be - persons who are so closely and directly affected by my act that I ought reasonably to have them in

contemplation as being so affected when I am directing my mind to the acts or omissions that are called in question . . . a

manufacturer of products, which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form

in which they left him with no reasonable possibility of intermediate examination, and with knowledge that the absence of reasonable

care in the preparation or putting up of products will result in an injury to the consumer's life or property, owes a duty to the

consumer to take that reasonable care.

"A man has a Duty of Care to conduct himself in such a way as to avoid harm to others, where a

reasonable man would have seen that such harm could occur".

Lords Thankerton and Macmillan supported Lord Atkin's opinion, with Lords Buckmaster and Tomlin

dissenting. Buckmaster said it was impossible to accept such a wide proposition and (anticipating

later "floodgates" arguments) that it was difficult to see how trade could be carried on if Lord Atkin's

principle was law. Buckmaster also opined, as did Lord Tomlin, that if such a duty of care existed it

must cover the construction of every article, not just food: "If one step, why not fifty?" Tomlin referred

to the Versailles train crash in 1842 caused by a defective axle, noting that, if Lord Atkin's principle

were to be law, every injured party would be permitted to sue the axle manufacturer in such a case.

The case was returned to Scotland for the Court of Session to apply the ruling to the facts of the

case. In the event, David Stevenson died within a year of the decision and his executors settled out

of court, for less than the original claim of £500.

[edit]Significance

As Justice Allen Linden has pointed out, Donoghue is an extension of a principle articulated

by Benjamin Cardozo in an earlier case in the United States, MacPherson v. Buick Motor Co. , which

the judges referred to in Donoghue. MacPherson pioneered the tortious principle of a general duty of

care, the starting point for any action in negligence, though the principles were expressed within the

context of product liability only.

Donoghue is perhaps best known for the speech of Lord Atkin [5]  and his "neighbour" or

"neighbourhood" principle, where he invoked Luke 10 to law so that, where an established duty of

care does not already exist, a person will owe a duty of care not to injure those whom it can be

reasonably foreseen would be affected by his acts or omissions. The effect of this case was not only

to provide people in the United Kingdom with a remedy against suppliers of consumer products even

where the complainant had no privity of contract  with those individual or company tortfeasors, but to

allow such people to bring negligence claims in any circumstance where the conditions for

establishing a duty of care were met.

In 1990, the House of Lords revised Lord Atkin's "neighbour" speech of Lord Atkins principle to

encompass public policy concerns articulated in Caparo Industries Plc. v Dickman  ([1990] 1 All ER

568). The three-stage Caparo test for establishing a duty of care requires (i) foreseeability of

damage, (ii) a relationship characterised by the law as one of proximity or neighbourhood and (iii)

that the situation should be one in which the court considers it would be fair, just and reasonable that

the law should impose a duty of given scope on one party for the benefit of the other. In other

jurisdictions, such as New Zealand, there is now a two-part test for novel fact situations, where the

establishment of a duty must be balanced against applicable policy matters.

Because of the significance of the case, in 1996 former Supreme Court of British Columbia Justice

Martin Taylor, Vancouver lawyer David Hay and filmmaker Michael Doherty produced an educational

documentary of the case. Besides recreating the events leading up to the case and "interviews" with

actors playing the significant participants in the case, the production includes a 1995 interview

with Lord Denning—then aged 96.[6] This was one of the last interviews with Lord Denning, who died

three years later. The film has been exhibited worldwide.[7]

[edit]

What is Privity in Contract LawPrivity in Contract Law

In contract law, privity means the relationships that exist between those engaged in contracts. Privity also looks at consideration in contracts.

What are the Rules?

There are rules which stipulate who can take action to sue another party within a contract. In the case of Dunlop v Selfridge (1915), this is where there was a contract between two parties, Dunlop and Selfridge, however, a third party could not sue Selfridge over an agreement over the price because the third party was not in contract with Selfridge. The court decided that there was no contract between the third party, and it could not have the right to sue. The privity rule shows only those who have engaged in a contract have the right to sue.However, in the case of Tweddle v Atkinson (1861), the contract was created for the benefit of a third party, but that person was not able to benefit from the payment that was intended for him under the contract.The rules of privity can cause disadvantages, for instance in the case of Jackson v Horizons Holidays (1975), this is where the plaintiff, Mr Jackson, booked a holiday for himself, his wife and his two children. Mr Jackson was informed that his original holiday was not ready and was offered an alternative, which he accepted. However, the holiday tuned out unsatisfactory and Mr Jackson and his family were disappointed. The plaintiff sued the company for breach of contract; the company initially denied the claims made by the plaintiff, but later admitted liability. The court awarded Mr Jackson damages; but the court did not divide the damages between the family members, and only awarded them Mr Jackson. The court decided that it was for Mr Jackson to consider his family in the damages awarded, and that the court could not award them separately. Mr Jackson appealed, the court decided that he sued for breach of contract for himself and his family, and therefore his damages recovered were for him and his family. The court also decided that the figure

awarded was right when considering himself and his family. However, it was decided that the damages could be extended to his family.

Exceptions to the Rule of Privity

There are certain exceptions to the rule of privity.

In the case of Eurymedon (1975), this is where an agent was involved in thecontract.

Statute laws that are made can also act as exceptions to the rule, and can override the common law in place.

Collateral contracts are when there is a situation where it allows a party to find a way to avoid the rule, an example of this is in the case of Shanklin Pier v Detel (1951).

Another exception is covenants which run with the land, which are restrictive and positive. For restrictive, this is in the case of Tulk v Moxhay (1848). For positive, in the case of Smith and Snipes Hall Farm v River Douglas Catchment Board (1949), the court decided that the covenant could run with the land.

In certain circumstances, restrictions on price are also allowed, which is another exception to the rule.

Rule of Privity

There have been cases which show how the rules of privity work.

In the case of Port Line v Ben Line Steamers (1958), the court decided that the contract was enforceable.

In the case of Re Schebsman (1943), this is where the court decided that the contract would be unenforceable.

In the case of Beswick v Beswick (1968), this is where a third party to a contract tried to enforce payment under a contract which was between her late husband and her nephew. Section 56 of the Law of Property Act 1925, was used to obtain property by a third party. However, the court decided that Mrs Beswick would not be allowed to enforce payment using the Act.

Changes in the Law

There have been changes in the law to allow those to claim what was supposed to be for someone’s benefit. The Contracts (Rights of Third Parties) Act 1999 has made changes that

allow rights to third parties. Section 1 of the Act begins, ‘a person who is not a party to a contract (a third party) may in his own right enforce a term of a contract if...’.

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