A Quick Summary of Price v Easton (1833)

Case name & citation: Price v Easton (1833) 4 B & Ad 433; 110 ER 518

Court and jurisdiction: Court of the King’s Bench
Judgment date: 17 January 1833
Area of law: Privity of contract under law; consideration

The case of Price v Easton (1833) (KB) illustrates the principle of privity of contract, which dictates that only parties to a contract can enforce its terms. Here’s a summary of the case and its implications:

Table of Contents

Facts of Price v Easton

1. A builder owed money to Price.

2. Easton agreed with the builder that if the builder did some work for Easton, Easton would pay the debt to Price.

3. The builder completed the work, but Easton did not pay Price.

4. Price, unable to recover from the builder and having no contractual relationship with Easton, sued Easton to enforce the promise.

Issue that arose

Was Price entitled to enforce Easton’s promise to the builder to pay the debt to Price?

Decision in Price v Easton

No, Price was not entitled to enforce the promise.

Reasoning

Privity of Contract: According to this doctrine, only parties directly involved in a contract have the right to enforce it. Since Price was not a party to the agreement between Easton and the builder, he could not enforce Easton’s promise. He had given no consideration for the arrangement between the parties.

Legal Precedent: At common law, a third party, even if they benefit from a contract, does not have the standing to enforce the terms of that contract.

Implications

Doctrine of Privity: The case reinforces the principle that only those who are parties to a contract can sue to enforce its terms or claim damages. A third party who benefits from a contract but is not a party to it cannot bring an action to enforce the contract.

Contractual Enforcement: To be entitled to enforce a contract, a party must have a direct contractual relationship with the promisor.

Limitations on Third-Party Claims: This case highlights the limitations on third parties seeking to claim benefits under agreements to which they are not a party.

In modern legal systems, many jurisdictions have modified this rule through legislation allowing third parties to enforce certain contracts under specific conditions, but the principle illustrated in Price v Easton remains a foundational element in contract law.

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