Thursday, 14 March 2013


-Privity of contract states that under a particular contract, only the original parties are subject to the rights and liabilities of that contract. This means it is only these parties which can sue/be sued.  Third parties do not have rights under that particular contract, and cannot hold one of the original parties liable for something that occurred under the contract.

-Privity of Contract through Assignment:
Assignment can occur where one of the original parties to the contract transfers their rights/obligations under a particular contract to a third party. The third party then becomes the ‘assignee’. Once this has been done, the ‘assignor’ (i.e. the original party who assigned his rights) loses his rights under the contract. He therefore does not have to comply with any obligations under the contract either. This means that he can no longer be held liable for any problem which results from the contract. The assignee now has to perform the assignor’s duties. Assignment can occur without the other original party’s acceptance.
-Privity of Contract through Delegation of Duties
This method involves one of the original parties to the contract delegating some of their duties to a third party. The third party (known as the delegatee), is now required to perform these duties under the contract. The original party (known as the delegator) is relieved from having to perform the specified duties. The major difference between the delegation of duties and assignment is that through the delegation of duties, the delegator remains liable for the actions of the delegatee. This means that if the delegatee in some way fails to carry out the duties which he is now responsible for, the delegator is responsible for ultimately ensuring that those duties are carried out. Liability thus still rests with the delegator.

a) Destruction of the subject matter
( Taylor V Caldwell) ->The claimant hired out a music hall in Surrey for the purpose of holding four grand concerts. The claimant went to great expense and effort in organising the concerts. However, a week before the first concert was due to take place the music hall was destroyed by an accidental fire. The claimant sought to bring an action for breach of contract for failing to provide the hall and claiming damages for the expenses incurred.
The claimant's action for breach of contract failed. The contract had been frustrated as the fire meant the contract was impossible to perform.
b) Personal incapacity will generally render the contract frustrated.
Condor V Baron Knights ->  A 16 year old agreed by contract to play the drums for the defendant band for 7 nights per week for 5 years. The claimant suffered a mental breakdown and was told by his doctor that he should not perform more than 4 nights per week. The band dismissed him. He brought a claim for wrongful dismissal.
The claimant's action was unsuccessful as his medical condition made it impossible for him to perform his contractual obligations and the contract was thus frustrated.


Tsamarotulqolbi Daneen said...

"Personal incapacity will generally render the contract frustrated".. answer for our tutorial questn no 3(b). :)

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