Privity is a rule of contract that states that only those who are party to a contract are bound by it and

can benefit from it, Tweedle V Atkinson. Beswick V Beswick shows an unfair illustration of the rule,
where the aunt was a beneficiary of the contract, but was not able to claim following a breach due to
her not being party to the contract. Due to the law leading to unjust outcomes, the Contract (Rights of
the Third Party) Act 1999 was made. Section 1 of the act allows someone who is not apart of the
contract to enforce the contract against either party to benefit from the contract’s terms. A third party
will be able to do this where the contract states that they can do so, S1(A), or they would benefit from
the term, s1(b), Nishin Shipping. Under S1(3), the third party must be expressly identified by name,
class, or description. This can be a specified person, or a group of people. However, the statute will
not apply if it appears that the parties did not intend a third party to benefit and can also be expressly
excluded through an exclusion clause. Businesses can also limit liability by including a limitation
clause which limits the payout of any claims. Additionally, there are several common law solutions
Judges created prior to the act that can be used to provide compensation to third parties. The first is
that the judge may award more damages to a claimant who is party to a contract to compensate those
who aren’t, which is most beneficial to social and domestic situations. Jackson V Horizon holidays
demonstrates this, where the patriarch of a family was awarded more damages to compensate his wife
and kids, as only he was party to the contract. A third party may have a collateral contract if the
claimant has given consideration to a contract through something such as a recommendation, as
illustrated by Shanklin Pier V Detel, where Shanklin had expressly recommended Detel paint be used
by contractors. Finally, the third common law solution is that a judge may enforce a restrictive
covenant, where there is an agreement made to deal with the land in a certain way, binding any
subsequent buyers of land even if they are not apart of that original agreement. For example, in the
case of Tulk V Moxhay, a building on a piece of land was restricted for further owners.
An offer is a willingness to enter a contract with firm and definite terms. It is not an invitation to treat.
An invitation to treat is only a sign that a party is willing to discuss terms. An advertisement is not an
offer but is an invitation to treat, as per Partridge V Crittenden. Goods on a shop window will be an
invitation to treat, and only become an offer when brought to the till, as per Fisher V Bell. Auction
Bids only count as an offer when the hammer is brought down, British Car Auctions V Wright.
Information Requests, such as asking how much an item would be sold for, are invitations to treat
rather than offers, Harvey V Facey. An offer can be made by any person, company or machine, such
as a tolling machine, Thornton V Shoe Lane Parking. The offer must be communicated, and cannot be
done through silence or implication, Taylor V Laird. Exact timing can be critical, such as requiring
response within a period of time, Stevenson V McLean. An offer can come to an end through
acceptance. An offer may also be revoked by one party, which can occur at any point before
acceptance, Routledge V Grant. An offer may also be revoked by a reliable third party known to both
members of the contract, Dickinson V Dodds. An offer can be rejected. If an offer is rejected, then it is
gone forever and going back to that offer creates a new offer. Rejection also occurs whenever a
counteroffer is made, Hyde V Wrench. If an offer has a limited amount of time set on it before it can
be accepted, or if a reasonable amount of time that would be expected to accept the offer has been
surpassed, the offer will end, Ramsgate Victoria Hotel V Montefiore. An offer will come to an end if
either the offer or the offeree die.
Acceptance must be positive and unqualified, meaning both parties accept the whole offer as it is.
They are accepting the offer as it is without any changes or qualifications. Ifs and Buts create a
counter offer, not acceptance, Hyde V Wrench. This is known as the Mirror Rule. Acceptance can be
in any form, so long as it is unequivocal. This does not traditionally include silence, unless agreed
upon by the two parties, Felthouse V Bindley. If a form of communication is specified, the offeree
must comply with that specified form for the acceptance to be valid, Yates v Pulleyn. An auto
generation of a signature over digital exchanges is just as valid as a written one, as per the Law
Commissions’ ‘Electronic Execution of Documents’ paper. Acceptance can happen via the conduct of
a party if one party agrees to perform the terms without there being a signed agreement, Reville V
Anotech. If acceptance is sent out in a letter, then acceptance will occur the moment the letter is sent
out if it is properly posted and is the expected form of communication. Acceptance will only occur
once the letter is read if it was not properly posted and was not the standard form of communication
between the parties. The offerer must have proof of the postage. Any form of electronic
communication means that the acceptance is official the moment it is sent out, the Brimnes, unless the
communication was sent outside of working hours or an agreed upon period, in which case it will be
accepted once office hours reopen, Brinkibon V Stahag Stahl. If there is communication that the party
expects acceptance by the end of the day, the rule for outside working hours does not apply, Thomas
V BPE.
Once offer and acceptance have taken place, it must be proven there was intention for the agreement
to be legally binding. Business agreements between companies are presumed to be legally binding.
The burden of proof is on the party who wants to show there was no intention to prove that. Edwards
V Skyways demonstrates this can occur even when the agreement is voluntary. Evidence which can
rebut the presumption includes vague terms and acts of good will. Free Gifts and competitions are
presumed to be legally binding, as businesses benefit from them. This can be rebutted. In Esso V
Commissioners of Excise and Custom the free coins were part of the contract for tax purposes. Letters
of Comfort are presumed to not be legally binding and are likened to references as seen in the case of
Kleinwort Benson V MMC. Where there is an unclear relationship which is in between social and
businesses, then it is up for the claimant to prove there was intention. For example, in Sadler V
Reynolds, the journalist was able to show a binding agreement as it was linked towards financially
benefiting the other party. Social and Domestic relationships are presumed not to be legally binding as
they are between family and friends. In Balfour V Balfour, the agreement made during the marriage
was not legally binding as it was made between a man and wife. However, where there are financial
implications, the presumption will be rebutted. For example, in Parker V Clarke, the couple was
financially reliant and their financial security was based within the agreement made to sell their
house.
For a contract to be valid, there must be good consideration between the parties. Consideration is
defined in Currie V Misa as “some right, interest, profit or benefit accruing to one party or some
forbearance, detriment, loss or responsibility given, suffered or undertaken by the other”.
Consideration must be sufficient, but it does not need to be adequate, meaning consideration doesn’t
need to be market value, but must have some value, Thomas V Thomas. Love and affection, such as
families, will not be found to have nominal value by judges, White V Bluett. However, this can be
stretched, as seen by Ward v Byham, where keeping a daughter happy was considered greater than the
duty as a parent to keep her safe. Consideration is between the promise and the promised, meaning
that a person cannot sue or be sued without providing good consideration, Tweedle V Atkinson. Past
consideration is not good consideration, which means that consideration will not be valid for future
payments if one side of the exchange has already occurred. There is an exception to this rule which is
when there is an implied promise to pay for a particular task, such as clear and prior understandings
that there would be some payment, Re Casey’s Patent. Lampleigh clarified this exception in that it
will be upheld if the task was taken at the promisor’s request and the parties understood there would
need to be some sort of reward. Performing a pre-existing duty is not good consideration for further
payment, as a pre-existing duty is something they are already required to do, such as a pre-existing
contract. If the offerees job becomes impossible without that duty however, there will be good
consideration. Williams V Roffery Bros has developed the law and finds consideration for the further
payments if C prevents the other party from loss or detriment. Performing a public duty is not good
consideration for further payment, as a public duty is legally enforceable in a prior contract. There can
be good consideration if the C goes above and beyond that public duty.