Shanklin Pier Ltd v Detel Products Ltd [1951] 2 KB 854 is a leading judgment on the subject of collateral contract

Collateral contract

A collateral contract is a contract where the consideration is the entry into another contract, and co-exists side by side with the main contract. For example, a collateral contract is formed when one party pays the other party a certain sum for entry into another contract...

s in English contract law

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...

. In it the High Court of Justice

High Court of Justice

The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...

 King's Bench Division created the principle of collateral contracts, an exception to the rule of privity of contract

Privity of contract

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....

 where a contract may be given consideration

Consideration under English law

Consideration in English law is one of the three main building blocks of a contract. Consideration can be anything of value , which each party to a legally binding contract must agree to exchange if the contract is to be valid. If only one party offers consideration, the agreement is not legally a...

 by entering into another contract.

Facts

Shanklin Pier Ltd hired a contractor to paint Shanklin Pier. They spoke to Detel Products Ltd about whether a particular paint was suitable to be used, and Detel assured them that it was, and that it would last for at least seven years. On the basis of this conversation Shanklin Pier Ltd instructed the contractors to use a particular paint, which they did. The paint started to peel after three months, and Shanklin Pier attempted to claim compensation from Detel Products. This was complicated by the fact that there was no direct contract between the two companies, only between Shanklin Pier and the contractors, and between the contractors and Detel Products.

Judgment

McNair J's judgment read: