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Privity - Coggle Diagram
Privity
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Privity of contract
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This means that a person who is not party to a contract cannot enforce rights under it, even if he or she is intended to benefit from it
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Exceptions
Statutory exceptions
- S11 married women property act 1882 (allows a spouse to claim on a life insurance policy taken out by the other)
- S148(7) road traffic act 1988 (allows and injured third party to recover compensation from the insurer of the party at fault)
- S56(1) law of property act 1925 (a person may obtain an interest in land or other property even if not named in the contract)
Collateral contracts
- An extra contract which runs alongside the main one and usually has a single term
- Allows the third party a right to enforce promises under a separate contract with the promisor
- The consideration for it is usually provided by the beneficiary of the collateral contract agreeing to enter into the main contract
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Covenants that run with the land
- When land is sold the purchaser often buys what is known as a leasehold title. This means that they are buying the lease of the property
- Covenants run with the land and bind the subsequent third party purchaser
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