ABC 2310 CONTRACT LAW PRESENTATION, Exams of Contract Law

ABC 2310 CONTRACT LAW PRESENTATION

Typology: Exams

2025/2026

Available from 04/18/2026

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ABC 2310 CONTRACT LAW PRESENTATION
Topic 1: Third Party Rights and Doctrine of Privity
1. Introduction
Contract law governs agreements between parties and ensures enforceability
of obligations. A key principle is the doctrine of privity, which determines
who can enforce a contract.
This presentation will cover:
The doctrine of privity
Third party rights
Exceptions to privity
Application in Kenya
Remedies for breach
2. Doctrine of Privity of Contract
Definition
The doctrine of privity states that:
Only parties to a contract can sue or be sued on it.
This means a third party, even if they benefit, cannot enforce the contract.
Key Cases Explained with Context
________________________________________
Tweddle v Atkinson
Facts (What happened?)
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ABC 2310 CONTRACT LAW PRESENTATION

Topic 1: Third Party Rights and Doctrine of Privity

1. Introduction Contract law governs agreements between parties and ensures enforceability of obligations. A key principle is the doctrine of privity , which determines who can enforce a contract. This presentation will cover:

  • The doctrine of privity
  • Third party rights
  • Exceptions to privity
  • Application in Kenya
  • Remedies for breach 2. Doctrine of Privity of Contract Definition The doctrine of privity states that: Only parties to a contract can sue or be sued on it. This means a third party , even if they benefit, cannot enforce the contract. **Key Cases Explained with Context

Tweddle v Atkinson Facts (What happened?)**

A man (Tweddle) was getting married His father and his father-in-law agreed: Each would pay money to Tweddle (the groom) The father-in-law did not pay Tweddle tried to sue ________________________________________ Issue Can Tweddle enforce the agreement made between the two fathers? ________________________________________ Decision The court said NO Tweddle: Was not a party to the contract Provided no consideration ________________________________________ Why this case matters It established the rule that: A third party cannot enforce a contract—even if it is made for their benefit Dunlop v Selfridge Facts

  • Dunlop (manufacturer) sold tyres to a dealer (Dew & Co)
  • Agreement: tyres must not be sold below a fixed price
  • A party may escape liability despite clear intentions 4. Exceptions to the Doctrine of Privity Courts and statutes have created exceptions to - Reduce unfairness Reflect real commercial practice Allow deserving third parties to claim rights a) Statutory Exceptions Parliament (law-makers) can create laws allowing third parties to enforce contracts Certain laws allow third parties to enforce rights:
  • Insurance laws-third parties can claim compensation
  • Road traffic laws-victims can claim from insurers Statutes override privity by directly granting enforceable rights to third parties b) Trusts A contract may create a trust in favor of a third party i.e One party holds property for the benefit of another Example: Case: Les Affreteurs Reunis v Walford Facts:
  • A broker arranged a contract
  • The contract said he would get commission
  • He was not a party Decision:
  • Court allowed him to claim
  • Because a trust was created in his favour A third party can enforce rights where a trust is created in their favour c) Agency An agent acts on behalf of a principal: The principal is treated as the real party to the contract and the principal can sue or be sued Case: Freeman & Lockyer v Buckhurst Park Properties Facts:
  • A company allowed someone to act like a director
  • He entered contracts Decision:
  • Company was bound
  • Because he had apparent authority Agency allows a third party (principal) to enforce a contract made on their behalf d) Collateral Contracts A separate agreement linked to the main contract.
  • Even though new owner was not original party In land law, obligations can bind third parties even without privity 5. Application in Kenya Kenyan contract law is largely based on English common law , including privity. However:
  • Courts may apply equity and fairness
  • Statutory provisions allow third-party claims in some cases
  • Modern commercial practice sometimes relaxes strict privity 6. Main Forms of Contracts in the Construction Industry (Kenya) Construction contracts regulate relationships between:
  • Employers (clients)
  • Contractors
  • Consultants They are usually written and governed by:
  • Law of Contract Act Forms of contracts used in kenya include- 1. Standard Form Contracts

Commonly used standardized agreements:

  • Joint Building Council (JBC) Contracts
  • International Federation of Consulting Engineers (FIDIC) Contracts Widely used for fairness and consistency 2. Lump Sum Contracts
  • Fixed price for entire project
  • Contractor bears risk 3. Unit Price Contracts
  • Payment based on quantity of work done
  • Flexible for uncertain projects 4. Cost Plus Contracts
  • Cost of project + contractor’s profit
  • Employer bears most risk 5. Design and Build Contracts
  • One contractor handles design and construction
  • Faster project delivery 6. Labour-Only Contracts
  • Contractor provides labour only

7. Discharge of Contract A contract may end by: - Performance- A contract is discharged when both parties fully perform their obligations - Agreement- Parties can mutually agree to end or change the contract - Frustration- An unexpected event makes performance impossible or very different - Breach- A contract ends when one party fails to perform their **obligations

  1. Remedies for Breach of Contract** If a contract is broken, remedies include:
    • Damages- Damages are monetary compensation paid to the injured party. Aims to put the injured party in the position they would have been in if the contract was performed
    • Specific performance- A court order requiring a party to perform their contractual obligation
    • Injunction- A court order preventing a party from doing something
    • Rescission- Cancellation of the contract, returning parties to their **original position
  2. Conclusion** The doctrine of privity remains a fundamental rule in contract law, but:
  • It has many exceptions
  • Courts and statutes increasingly protect third parties
  • The law continues to evolve to meet modern needs REFERENCES Textbook
  • Turner, C. (2019) Unlocking Contract Law. 5th edn. London: Routledge.
  • Law of Contract Act (Cap. 23), Laws of Kenya.