Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd
House of Lords
Citations: [1915] AC 847.
Facts
Selfridge manufactured car tyres. They agreed to grant an accessory manufacturing company a discount on their goods if that company bought a particular quantity of products within a specified period. The company also agreed not to undercut Selfridge’s prices.
The defendant ordered some of Selfridge’s tyres from the other company. They were aware of the contract between Selfridge and the company. The contract between the defendant and the company forbid the defendant from undercutting Selfridge’s prices. The defendant undercut Selfridge’s prices, so Selfridge sued them for breach of contract.
Issue(s)
- Could Selfridge sue for breach of a contract which they were not a party to?
Decision
The House of Lords held for the defendant. Selfridge were not a party to their contract, as they had provided the defendant no consideration. They therefore had no right to sue for breach of that contract.
This Case is Authority For…
At common law, a person who has not provided consideration for a contract cannot sue or be sued on that contract. This is known as ‘privity of contract‘.
The privity of contract rule has been modified by the Contracts (Rights of Third Parties) Act 1999.
Other
Lord Parmoor noted that ‘a person cannot claim to be a principal to a contract, if this would be inconsistent with the terms of the contract itself.’
