Beswick v. Beswick
Encyclopedia
Beswick v Beswick [1967] UKHL 2 is a landmark English contract law
case on privity of contract
and specific performance
. The House of Lords disagreed with Lord Denning MR's dicta in the Court of Appeal that someone specifically intended to benefit from a contract could enforce it.
Today Lord Denning MR's decision has been given effect to through the Contracts (Rights of Third Parties) Act 1999
.
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 privity of contract
.
Danckwerts
LJ and Salmon LJ concurred in the result, though not with Lord Denning MR's reasoning.
of the contract.
Lord Reid
's judgment outlined the details, with which Lords Hodson
, Pearce
, Upjohn
and Guest
concurred.
In Australia, Coulls v. Bagot’s Executor and Trustee Co Ltd (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 Contracts (Rights of Third Parties) Act 1999
, 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.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case on privity of contract
Privity in English law
Privity is a doctrine in English contract law that covers the relationship between parties to a contract and other parties or agents. At its most basic level, the rule is that a contract can neither give rights to, nor impose obligations on, anyone who is not a party to the original agreement, ie a...
and specific performance
Specific performance
Specific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential...
. The House of Lords disagreed with Lord Denning MR's dicta in the Court of Appeal that someone specifically intended to benefit from a contract could enforce it.
Today Lord Denning MR's decision has been given effect to through the Contracts (Rights of Third Parties) Act 1999
Contracts (Rights of Third Parties) Act 1999
The Contracts Act 1999 was an Act of the Parliament of the United Kingdom that significantly reformed the common law Doctrine of Privity and "thereby [removed] one of the most universally disliked and criticised blots on the legal landscape"...
.
Facts
Lord Denning MR 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 privity of contract
Privity in English law
Privity is a doctrine in English contract law that covers the relationship between parties to a contract and other parties or agents. At its most basic level, the rule is that a contract can neither give rights to, nor impose obligations on, anyone who is not a party to the original agreement, ie a...
.
Court of Appeal
Lord Denning MR held that Mrs Beswick was entitled to claim in her capacity as a third party intended to benefit from the contract. He said,Danckwerts
Harold Danckwerts
Sir Harold Otto Danckwerts was a lawyer and judge in England and Wales.Harold Danckwerts was appointed a Justice of the Chancery Division of the High Court of England and Wales on 1 June 1949. A few days later he was knighted. He was promoted to be a Lord Justice of Appeal in the Court of Appeal...
LJ and Salmon LJ concurred in the result, though not with Lord Denning MR's reasoning.
House of Lords
The House of Lords disagreed with Lord Denning MR 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 specific performanceSpecific performance
Specific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential...
of the contract.
Lord Reid
James Reid, Baron Reid
James Scott Cumberland Reid, Baron Reid, CH, KC FRSE was a Scottish Unionist politician and judge. His reputation is as one of the most outstanding judges of the 20th century....
's judgment outlined the details, with which Lords Hodson
Charles Hodson, Baron Hodson
Francis Lord Charlton Hodson, Baron Hodson PC, KC, MC , always known as Charles Hodson, was a British judge.The son of Reverend Thomas Hodson, he was educated in Cheltenham College...
, Pearce
Edward Pearce, Baron Pearce
Edward Holroyd Pearce, Baron Pearce PC was a British judge.Born in Sidcup in Kent, he was educated at Charterhouse School and Corpus Christi College, Oxford. Called to the Bar by Lincoln's Inn and Middle Temple in 1925, he became deputy chairman of the East Sussex Quarter Sessions in 1947...
, Upjohn
Gerald Upjohn, Baron Upjohn
Brigadier Gerald Ritchie Upjohn, Baron Upjohn CBE, PC, DL was a British soldier and judge.The younger son of William Henry Upjohn served in the Welsh Guards during the Second World War, reaching the rank of brigadier. In 1948, he sat with Sir George Lynskey and Sir Godfrey Vick on the Lynskey...
and Guest
Christopher Guest, Baron Guest
Christopher William Graham Guest, Baron Guest PC was a British judge.On 20 January 1961, he was appointed Lord of Appeal in Ordinary and was created a life peer with the title Baron Guest, of Graden in the County of Berwick...
concurred.
Significance
In Smith & Snipes Hall Farm Ltd v. River Douglas Catchment Board [1949] 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 (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 Contracts (Rights of Third Parties) Act 1999
Contracts (Rights of Third Parties) Act 1999
The Contracts Act 1999 was an Act of the Parliament of the United Kingdom that significantly reformed the common law Doctrine of Privity and "thereby [removed] one of the most universally disliked and criticised blots on the legal landscape"...
, 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.
See also
- English contract lawEnglish contract lawEnglish contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
- Contracts (Rights of Third Parties) Act 1999Contracts (Rights of Third Parties) Act 1999The Contracts Act 1999 was an Act of the Parliament of the United Kingdom that significantly reformed the common law Doctrine of Privity and "thereby [removed] one of the most universally disliked and criticised blots on the legal landscape"...
- Dutton v Poole (1677) 2 Lev 211, for an old case where it was held that third parties could enforce a benefit
- Tweddle v Atkinson (1861) 1 B&S 393, the traditional rule of privity
- Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847, affirming the privity rule 50 years later in a resale price maintenanceResale price maintenanceResale price maintenance is the practice whereby a manufacturer and its distributors agree that the latter will sell the former's product at certain prices , at or above a price floor or at or below a price ceiling...
case. - Scruttons v Midland Silicones Ltd [1962] AC 446, the privity rule applied to a clause excluding liability in tort
Further reading
- Flannigan, 'Privity - The End of an Era (Error)' (1987) 103 Law Quarterly ReviewLaw Quarterly ReviewThe Law Quarterly Review is an academic legal periodical published by Sweet & Maxwell. It was first published in 1885...
564 - Robert StevensRobert StevensRobert Stevens and variants Bob Stevens and Bobby Stevens is the name of:As Robert Stevens:*Robert Stevens , Dean of Rochester from 1820 to 1870* Robert Stevens, one of three pseudonyms for Robert Kellard , American actor...
, 'The Contracts (Rights of Third Parties) Act 1999' (2004) 120 Law Quarterly ReviewLaw Quarterly ReviewThe Law Quarterly Review is an academic legal periodical published by Sweet & Maxwell. It was first published in 1885...
292