was a landmark English contract law case on

privity of contract The doctrine of privity of contract is a common law principle which provides that a contract cannot confer rights or impose obligations upon any person who is not a party to the contract. The premise is that only parties to contracts should be ab ...

and

specific performance Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. It is typically available in the sale of land law, ...

. The Lords, overruling the decision of

Lord Denning Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 wh ...

in the Court of Appeal, ruled that a person who was not party to a contract had no independent standing to sue to enforce it, even if the contract was clearly intended for their benefit. Today the judicial precedent has been codified by statute in the United Kingdom, and Lord Denning's decision has largely been given effect by the

Contracts (Rights of Third Parties) Act 1999 The Contracts (Rights of Third Parties) Act 1999 (c. 31) is an Act of the Parliament of the United Kingdom that significantly reformed the common law doctrine of privity and "thereby emovedone of the most universally disliked and criticised b ...

. However the case remains good law in many other Commonwealth

common law jurisdictions In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...

Facts

Lord Denning in the Court of Appeal started describing the facts of the case in the following way. The agreement was that Peter assign his business to his nephew in consideration of the nephew employing him for the rest of his life and then paying a weekly annuity to Mrs Beswick. Since the latter term was for the benefit of someone not party to the contract, the nephew did not believe it was enforceable and so did not perform it, making only one payment of the agreed weekly amount of 5 pounds. The nephew argued that as Mrs Beswick was not a party to the contract, she was not able to enforce it due to the doctrine of

Decision

Court of Appeal

Lord Denning held that Mrs Beswick was entitled to claim in her capacity as a third party intended to benefit from the contract. He said,

968 Year 968 ( CMLXVIII) was a leap year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Emperor Nikephoros II receives a Bulgarian embassy led by Prince Boris (th ...

Ch. 538, 557 Danckwerts LJ and Salmon LJ concurred in the result, though not with Lord Denning's reasoning.

House of Lords

The House of Lords disagreed with Lord Denning in the Court of Appeal, that the law allowed third parties to sue to enforce benefits under a contract. However, they held that Mrs Beswick ''in her capacity as Mr Beswick's administratrix'' (i.e. as the person representing someone's estate who dies without a will) could enforce the nephew's promise to pay Mrs Beswick an annuity. Furthermore, Mrs Beswick was entitled to

of the contract. Lord Reid's judgment outlined the details, with which Lords Hodson, Pearce,

Upjohn The Upjohn Company was a pharmaceutical manufacturing firm founded in 1886 in Hastings, Michigan, by Dr. William E. Upjohn who was an 1875 graduate of the University of Michigan medical school. The company was originally formed to make ''friabl ...

and Guest concurred.

Significance

In '' Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board''

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2 KB 500, 514, Denning LJ had already tried to dispose of the English doctrine of privity. He had said, In Australia, ''

Coulls v. Bagot’s Executor and Trustee Co Ltd Anthony Coulls is a British museum curator and historian. He is the Senior Curator of Rail Transport and Technology at the National Railway Museum, the author of several books on railway and industrial history, and is active in the steam heritage ...

'' (1967) 119 CLR 460 shows the approach has been similar. Here the contract was between a husband (Mr Coulls) and a company (Bagot's). Mrs Coulls was not a party to it. Even if she was, she would not be able to enforce it, as she gave no consideration. Bagots was entitled to the benefit of this contract as executor of Mr Coull's Estate. Many people, including judges had called for statutory reform and in England this came in the form of the

, which gives a general right to enforce the benefit of a contract when one was either expressly identified as being able to enforce it, or one was intended to benefit.

Notes

{{reflist

External links

full text of House of Lords decision

1967 in case law Lord Denning cases English privity case law English remedy case law 1967 in British law House of Lords cases