A CRITICAL EXAMINATION OF THE DOCTRINE OF PRIVITY UNDER THE LAW OF CONTRACT IN NIGERIA.

A CRITICAL EXAMINATION OF THE DOCTRINE OF PRIVITY UNDER THE LAW OF CONTRACT IN NIGERIA.

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                                                   ABSTRACT   

The doctrine of privity of contract is dynamic and  inevitable; therefore it must not be taken with levity. In PRICE V EASTON for instance it was held that no one may be entitled to or bound by the terms of a contract to which he is not an original party. The doctrine dictates that a person who is not a party to a contract can not be granted contractual rights by the contract or be placed under contractual obligation by it. The question now is “WHY SHOULD WE ALLOW ONLY PARTIES TO A CONTRACT TO HAVE RIGHTS UNDER IT”. These and more will be discussed in this long essay.

For the sake of clarity, this long essay will be divided into four (4) chapters. Chapter 1 looks at the law of contract at a glance (putting into consideration the fact that the doctrine of privity is sheltered by the law of contract).

The history of the law of contract and that of the doctrine of privity, the nature of the law of contract and what makes a contract valid (noting that there are some agreement that will be seen as a contract by the parties and is not known to law), the various types of contract  and the relevance of the contract will also be considered under the first chapter

Chapter 2 is going to be more precise as we will deal basically with the doctrine of privity, the rationale for the doctrine and the way it operate, its relation to some other contractual terms will also be considered here.

Chapter 3 will cover situations in which the doctrine  will not apply (i.e. its exceptions) such as under an agency relationship, insurance concept, the provision of sec. 81(1) of the property and conveying law, western Nigeria, covenant running with land, etcetera will be looked at.

Chapter 4 being the last chapter will focus on the need for reform of the doctrine by making some recommendation and suggestions on how best the doctrine can be applied.

TABLE OF CONTENTS

Title page

Certification

Dedication

Acknowledgement

Abstract

Table of content

Table of Cases

CHAPTER ONE: LAW OF CONTRACT

1.1.1     The History of the Law of Contract and the

                Doctrine of Privity

1.1.2       The Nature of the Law of Contract

1.1.3       Definition and Formation of Contract

1.2          Elements of a Valid Contract

1.2.1       Offer

1.2.2       Acceptance

1.2.3       Consideration

1.2.4      Intention to Enter into Legal Relation

1.2.5    Capacity to Enter into a Contract

1.3       Classification of Contract

1.4      Essence of the Law of Contract

CHAPTER TWO: SCOPE OF THE DOCTRINE OF PRIVITY OF CONTRACT

2.1            The General Rule

2.1.1    The Meaning and Nature of the Doctrine

2.2            Reason for the Doctrine

2.3            Operation and Application of the Doctrine

2.4            Operation of the Doctrine in Relation to some Contractual terms

2.4.1       Privity and Consideration

2.4.2      Effects of Privity on Exemption Clause

2.4.3      Privity and Collateral Contracts

CHAPTER THREE: EXCEPTION TO THE DOCTRINE OF PRIVITY

3.1            Agency

3.2            Restrictive Covenant (Covenant Running with Land)

3.3            Trust Concept and Privity

3.4            Insurance Concept

3.5            Banker’s Commercial Credits

3.6            Assignment of Choses in Action

CHAPTER FOUR

4.1     Summary

4.2     Conclusion

4.3     Recommendation

TABLE OF CASES

AKENE V BRITISH INSURANCE CO. NIG LTD (UNREPORTED)

BESWICK V BESWICK (1966) Ch, 538

CHUBA IKPEAZU V ACB LTD (1965) NMLR 374

COLLEN V WRIGHT (1857) E & B 647, 372

DANJUMA V STANDARD CO. Of  NIG LTD (1975) 2 CCHJ, 179

DEMPSTER V PATERSON, ZOCHONIS & CO. (1924) AC 522

DONOGHUE V STEVENSON (1932) AS 526

DRIVE YOURSELF HIRE CO.LTD V STRUTT (1954) A QB 250

DUNLOP PNEUMATIC TYRE CO. LTD V SELFRIDGE & CO LTD (1925) AC 847 (A) 853

DUTTON V POOLE (1678) 2. LEV 210

EKUMA V SILVER EAGLE SHIPPING AGENCIES (1987) A NLR

FORMBY V BARKER (1908) 2 Ch 539

GANDY v GANDY (1834) 30 Ch D 54

GBADAMOSI V MBADIWE (1964) 2 ANLR 19

GREGORY & PARKER V WILLIAMS 91817)  3 Mer. 582

HYDE V WRENCH (1840) 3 Beave. 334

HIRACHAND PUNAMCHAND V TEMPLE (1911) 2 K.B 330

JACKSON V HORISON HOLIDAY LTD (1975) 3 AER,  92

KEPONG PROSPECTING V SCHIMDT (1968) AC 890

LAW DEBENTURE TRUST CORP PLC V URAL CASPAIN OIL CORP LTD (1993) 2 AER, 355

Les Affreteur Reunis SA V Leopold Walford (London) Ltd (1919) AC 801

LORD STRATHCONA STEAMSHIP CO. V DOMINION COAL (1926) AC 108

MARCHINGTON V VERNON (1786) 1 B& P 101 N (C )

NASH V INMAN (1908)

ODUNFUNDADE V OSO SAMI (1972) NLR 52

PENN V BRISTOL & WEST BUILDING (1997), WLR 1356

PORTLINE LTD V BENLINE STEAMERS LTD (1958) A QB 146

PRICE V EASTON (1833) 4 B & Ad. 433

R & CLARKE (1927) 40 CLR 227

R V LAMBLE (1982) AC 449.

RATZLAFF V FRANZFOODS (1971)

RE HUDSON (1885) 53 L.J CR 811

RE SCHEBSMAN, OFFICIAL RECEIVER V CARGO SUPERIN TENDENTS (LONDON) LTD (1919) AC 801

SCRUTTONS LTD V MIDLAND SILICONES LTD (1962) AC 446

SHADRACK ERI V ONADJERIA DAMIFO (Unreported) H.C of formal Bendel State.

SHANKLIN PIER V DETEL PRODUCTS LTD (1951) 2 K.B 854

SMITH V RIVER DOUGLAS CATCHMENT BOARD (1949) 2 K.B 504

SULE NORWICH FIRE INSURANCE CO. (Nig) Ltd (Unreported) H.C of Western Nig J.P

THE EURYMEDON (1975) AC 154

THOMAS V THOMAS (1875) LR 10 EXCL 153

TULK V MOXHAY (1848) 2 Ph 774

TWEDDLE V ATKINSON (1861) 1 B & S at P 398

WAUGH v H.B CLIFFORD & SONS 91982) 1 Ch. 374

WOODAR INVESTMENT DEVELOPMENT LTD V WIMPEY CONSTRUCTION UK LTD (1988) HL

CHAPTER ONE: LAW OF CONTRACT

1.1.1 THE HISTORY OF THE LAW OF CONTRACT AND THE DOCTRINE OF PRIVITY

The contract idea is ancient. Thousands of years ago, the Egyptians and Mesopotamians recognized devices like contract, by the 15^th century the common law courts of England  had