Beswick v Beswick
House of Lords
Citations: [1968] AC 58; [1967] 3 WLR 932; [1967] 2 All ER 1197; (1967) 111 SJ 540; [1967] CLY 641.
Facts
The deceased, being 70 years old and became ill, decided to step back from his business. He agreed with the defendant to transfer his business’ goodwill and tools to the defendant. In return, the defendant would employ the deceased as a consultant for the remainder of his life. After his death, the defendant was to pay the deceased’s wife £5 a week. The wife was not a party to this contract.
When the man died, the defendant paid the wife one sum of £5 and then refused to make further payments. The wife sued for specific performance of the agreement. She did this both in her capacity as executor of the deceased’s estate and in her own right. The defendant argued that the wife could not enforce the contract in her own name because she was not a party to it. He also argued that the deceased’s estate had not suffered any loss from his breach of contract. As such, the estate was only entitled to nominal damages.
Issue(s)
- Could the wife sue for breach of contract in her own right?
- Was the deceased’s estate entitled to more than nominal damages?
Decision
The House of Lords held in the wife’s favour. The wife could not sue in her own right, but she could sue in her capacity as executor of the deceased’s estate. That estate was entitled to sue for for specific performance of the agreement. It was not limited to suing for nominal damages. This was a case in which damages would be an inadequate remedy and justice would not be served by nominal damages. Therefore, the Lords granted the estate an order for specific performance.
This Case is Authority For…
This case demonstrates some of the ways the courts tried to avoid the limitations of the privity of contract rule. In the modern era, the wife would likely be able to sue in her own right under the Contracts (Rights of Third Parties) Act 1999.
Other
On of the wife’s arguments for being able to sue in her own right relied on s.56 of the Law of Property Act 1925. The Lords confirmed that the provisions of that Act are limited to real property (interests in land). Accordingly, they could not be used in this case.
