1. You could avoid the incident by accompanying the girls to the classroom.
I work here for three years.

2. The student was sent back from the school after he threw potatoes at a teacher.
The school has a history to not react quickly enough.
She is an experiemented teacher.

3. This is a negligence.
You are being prosecuted for negligence.

4. Contract II Today looking at Contract II
Concepts not complicated but there is a lot of vocabulary.

5. Privity of contract
To begin, lets discuss the doctrine of privity

6. Privity of contract
The simple rule used to be that at a person who is not a party to a contract can neither
be sued under it.
nor
sue under it.
The simple rule used to be that a person who is not a party to a contract can neither be sued under it nor sue under it.
The first of these is a fundamental principle of contract law. A third party cannot be subjected to a burden by a contract to which he is not a party – it would be wholly unreasonable for a legal system to enable two parties to subject a third party to contractual obligations of which he was completely unaware. This remains true today.
However the second element was more controversial. The rule used to be that a person who was not party to a contract could not sue upon a contract to obtain the promised performance, even in the case where the contract was entered into with the object of benefitting the third party.
This rule dated from the 19th century (1861, Tweddle v Atkinson) > very closely linked to the doctrine of consideration, saw last week > if a party does not provide consideration, they cannot enforce a promise. Most legal theorists would argue that it is a distinct concept, but the two principles are very closely linked.

7. Privity of contract Beswick v Beswick (1968)
PB passed his business to his nephew JB, in exchange for JB paying
PB £6.10 a week during PB’s lifetime
PB’s wife £5 a week after PB’s death
After PB’s death, JB stopped all payments
PB’s widow could not bring a claim to enforce payment, since she was not a party to the contract
We can see how this worked in the famous case Beswick v Beswick
PB passed his business to his nephew JB, in exchange for JB paying
PB £6.10 a week during PB’s lifetime
PB’s wife £5 a week after PB’s death
After PB’s death, JB stopped all payments
Could PB’s widow bring a claim? NO
PB’s widow could not bring a claim to enforce payment, since she was not a party to the contract
In this particular case the widow did get paid – Any idea how? she was the administratix of her husband’s estate > able to sue in his name – he was a party to the contract.
But we can see that this rule could create injustice, and during the twentieth century there was growing disquiet about it within the judiciary.
(Also applied where third party seeks to rely on a term in contrcat as a defence – eg if A contract with B to transport goods, there is often an exclusion clause limiting A’s liability (limiting damages will have to pay if goods damaged). However, if A then subcontract part of that work to C, for example loading and unloading the goods, the limit would not apply to C. C would not be protected by the clause.

8. Privity of contract
The Contracts (Rights of third parties) Act 1999 introduced a limited third-party right of action to enforce a term of a contract made between two other parties.
A third party can now enforce provisions in a contract if:
the contract expressly provides that he may or
the contract purports to confer a benefit on the third party
and the contracting parties did not intend to exclude the third-party’s right of action
As a result in 1999 the gov passed the Contracts Act 1999,
Statute – we said there are relatively few statutes in contract law, it is mostly case law, but this is one of the statutes that do exist
The Contracts Act 1999 introduced a limited third-party right of action to enforce a term of a contract made between two other parties.> creates a substantial exception to the DOP
third parties can now enforce provisions in a contract if
the contract expressly provides that he may > in Beswick if the contract had stated that Mrs Beswick would have the right to enforce JB’s payment of the £5
the contract purports to confer a benefit on the third party > one of the purposes of the parties bargain must have been to benefit the third party (does not have to be principal aim, but cannot just be an incidental effect)
AND the contracting parties did not intend to exclude the third-party’s right of action > strong presumption that third parties can enforec their rights but contracting parties can specifically state that the third party will not have the right to enforce any term of the contract
To be absolutely clear, when the contrcats act appllies no consideration is required from the third party > exception to rule of consideration

9. Exceptions

10. Agency An agent acts on behalf of his principal
A contract entered into by an agent will bind the principal if the agent has:
express authority
implied authority or
apparent authority
to contract in P’s name.
There are also some other established exceptions to the doctrine of privity.
The first of these is Agency
An agent acts on behalf of his principal
A contract entered into by an agent will bind the principal if the agent has:
express authority clear and explicit authority
implied authority general authority to enter into contracts necessary to carry out the principal’s instructions
apparent authority P’s words or conduct lead a third party to conclude that A has authority to act on his behalf.
to contract in P’s name

11. Assignment
It is possible to assign (=transfer) rights (= a benefit) under a contract
(subject to the express terms of the contract and certain restrictions).
However, obligations to a third party cannot be transferred unless he consents.
The second exception is assignment.
This is when one of the parties is replaced by someone else
It is possible to assign (=transfer) rights (= a benefit) under a contract
(subject to the express terms of the contract and certain restrictions).
Obligations to a third party cannot be transferred unless he consents.
Novation: occurs when a new contract is substituted for an existing contract, usually when one party transfers all his rights and obligations to a third party.
English law provides that the benefit of a commercial contract is prima facie assignable, whereas the burden cannot be assigned freely. The seller will remain liable to perform any obligations which still have to be fulfilled under the contract.
Lord Browne-Wilkinson stated definitively that the burden of a contract may never be assigned. He said: "It is trite law that it is, in any event, impossible to assign "the contract" as a whole, i.e. including both burden and benefit. The burden of a contract can never be assigned without the consent of the other party to the contract in which event such consent will give rise to a novation."

12. Assignment v. Novation
Novation occurs when a new contract is substituted for an existing contract, usually when one party transfers all his rights and obligations to a third party.

13. A collateral contract
A subsidiary agreement which induces a party to enter into a contract.
Can allow a third party (A) to sue the maker of a promise on which they have relied (C).
This final term is not an exception to privity. If a party can establish that there is a collateral contract it can be a way of avoiding or circumventing the doctrine of privity.
A CC is a subsidiary agreement which induces a party to enter into a contract.
If a court finds that there is a CC, it Can allow a party (A) to sue the maker of a promise on which they have relied (C).
This can occur as follows;
C assures A that her product is suitable for his requirements.
A then contracts with B, and tells them to use C’s products.
So there is a contract signed between A and B, or and a sales contract between B and C, but no contract between A and C.
If the product is in fact not suitable, yhe court may find that there is a collateral contract between A and C (C offered a promise of suitability in return for A instructing B to use their product)
EXERCISE

14. John owes Big Company £1,000. Big Company sells the right to recover this debt to DebtsRUs. DebtRUs now has the right to pursue John for payment.
Shiny windows has a contract to install all the windows in Big Company's new offices. They have too much work, and so ask Brilliant panes to do the work instead. Big Company agrees to this.
Big Company assured Sue that their paint was suitable for her project (painting a large bridge) and would last for at least seven years. As a result, Sue entered a contract with Fab Painters, and stipulated that they should use Big Company's paint. In fact the paint is not suitable, and starts to peel off after three weeks. Sue wants to sue Big Company.
Margaret is the Sales Director for Techmech. She signs a contract with Philip, a local businesssman, to install Techmech's new account installation software.
3. Which of these example demonstrates:
- agency?
- assignment?
- a collateral contract?
- novation?

15. Terms
In the second part of the presentation we will consider the terms of a contract:

16. Express v. implied terms
Express terms: specifically agreed upon by the parties
The parol evidence rule: in general, oral or other evidence cannot be adduced to add to, vary or contradict the express terms of the written agreement.
An entire agreement clause in a contract states that the contract is the complete and final version of the agreement
Express terms: specifically agreed upon by the parties. Express terms may be agreed orally or in writing.
Where the contract is made orally, the ascertainment of contractual terms may involve difficult questions of fact, but the task of the judge is simply to decide what was actually said by each party
Written contracts raise more difficulties. One of the issues raised is whether the court can go beyond the written agreement in an attempt to discover additional terms to the contract. ???
The parol evidence rule:gives written documents legal priority – it means that in general, oral or other evidence cannot be used to add to, vary or contradict the express terms of the written agreement.
The purpose of this rule is the promotion of certainty.
However there are many exceptions to this rule, so that it does not have significant effect in practice (if ask > eg doesn’t apply if written doc not intended to contain whole of the agreement)
To further ensure certainty, parties may decide to add an entire agreement clause to their written contract – this states that the contract is the complete and final version of the terms of the agreement, and so means that nothing said during negotiations or previous discussions can later be presented as a term.

17. Express v. implied terms
Implied terms: terms implied into a contract, based on
statute: e.g. the Sale of Goods Act (1979)
custom: a term will be incorporated if it is a generally accepted custom in the particular trade and locality
common law:
terms “implied in fact”: to give effect to the unexpressed intentions of the parties
terms “implied in law”: implied into all contracts of a particular type
Implied terms: terms not specifically agreed upon implied into a contract,
These can be based on statute eg SOGA 1979 means that it is an implied condition for a sale of goods that goods are of satisfactory quality and fit for the purpose for which they were supplied. Similar protections in relation to contracts for the provision of services
.custom: a term will be incorporated if it is a generally accepted custom for those doing business in the particular trade and locality where the contract was formed, and if it is such that an outsider making enquiries could not fail to discover itFinally terms can be implied at common law
There are two types of terms implied at commo law:
terms “implied in fact”: to give effect to what the court preceives to be the unexpressed intentions of the parties (IF PUSH, TEST IS OF BUSINESS NECESSITY, IF THE TERM IS NECESSARY TO MAKR THE CONTRACT WORK)
terms “implied in law”: implied into all contracts of a particular type eg all employment contracts or all contracts between landlords and tenants, based on the general relationship of the parties to that type of contract

18. Terms v. (mere) representations
statements made during negotiations which may have induced a party to sign the contract
do not form part of the contract
Terms
are binding (failure to comply constitutes a breach of contract)
There is an important distinction between terms, whether express or implied, and representations (often called mere representations = simple)
Representations
statements made during negotiations which may have induced a party to sign the contract
do not form part of the contract
Terms
are binding

19. Terms v. (mere) representations
When deciding if a statement made during negotiations is a term, the court considers:
its importance to the parties
the respective knowledge of the parties
the manner in which the statement was made
whether it is written into the contract
its importance to the parties: likely to be a term if of such importance to person to whom it is made that f it had not been made he would not have entered into the contract.
the respective knowledge of the parties, and in particular if one of the parties has specialist knowledge: If the statement is made by a specialist to a non-specialist more likely to be a term – eg a car dealer selling a car to a member of the public, the dealer is a professional and has expert knowledge, member of public thinks he can trust what he says. However, a member of the public selling his car to a car dealer – statement more likely to be a representation.
, the manner in which the statement was made: whether is it made with absolute certainty, or with hesitation. If the party making the statement advises the other party to verify what he is saying, for example by getting an expert opinion, it is more likely to be a representation. If he assures the other party that no verification is needed, it is more likely to be a term.
whether it is written into the contract; written it’s a term, but a contract may be partly written and partly oral