By Kamana Divya Sree (DSNLU, Vizag)
Facts of Case
Mr. Peter Beswick, an elderly coal merchant entered into an agreement with his nephew Mr. John Joseph Beswick on 14th March 1962. Under this agreement, Mr. Peter Beswick assigned the assets of his coal business to his nephew Mr. John Joseph Beswick and in return, his nephew agreed to pay him a sum of £6 10s per week rest of his life and after his death £5 to be paid to his wife i.e Mrs. Peter Beswick as an annuity. Mr. John Joseph Beswick paid Mr. Peter Beswick until his death and made only one payment to his widow. Mrs. Peter Beswick brought an action against Mr. John Joseph Beswick for failing to pay the annuity. She did so in two capacities :
1) As administratrix of her late husband’s estate; and
2) In her personal capacity
Can Mrs. Peter Beswick sue her nephew either in her own personal capacity or in the capacity of the executrix of the will, or both?
Court of Appeal
Initially the Vice-Chancellor of the Chancery Court of the country Palatine of Lancaster dismissed the claim for specific performance. Then the case came to the the court of appeal. Here Mr. Lord Denning held that the plaintiff is entitled to remedy both in her personal capacity and also as the adminstratix of her late huband’s estate.
House of Lords
Upon appeal to the House of Lords, it was held that Mrs. Peter Beswick in her capacity as an adminstratix was entitled to specific performance of the agreement made between her husband and her husband’s nephew. It was also held that the commonly existing Doctrine of Privity of Contract had to be applied and Mrs. Peter Beswick’s action under personal capacity cannot be maintained.
Doctrine of Privity of Contract
“A person who is not a party to a contract cannot enforce it or any of its terms. Even if the person can show that one of the parties to the contract was acting as his agent, he will still be unable to enforce it if he has not provided consideration”
In general privity of contract as a relation where the parties entering into a contract can sue each other but restrict it from letting a third person sue them. Only the parties entering into the contract can sue each other. Only a promisee may enforce the contract and if a third person is not a promisee to the contract then he has no right to enforce it. This principle was stated in the case Dunlope True Co v. Selfridge. There is also a principle which says that the consideration must move from the promisee which was given in the Tweddle v. Atkinson case. The privity of contract only occurs between parties in a contract and is most common in contract of sale of goods or services.
Specific performance is an equitable relief granted by the Court to enforce contractual obligations between the parties. It is a remedy in performance as opposed to a claim sounding in damages for breach of contract where pecuniary compensation is granted as relief for failure to carry out the terms of the contract.