Darlington BC v Wiltshier Northern Ltd [1995] 1 WLR 68

Court of Appeal

Basic Facts: DBC (Darlington BC) contracted with MG to build a leisure center, and MG subcontracted W (wiltshier) for the construction. After defects were discovered, MG assigned its rights to DBC, who then sued W for damages.

Issue for the Court: Can a party recover damages for a breach affecting a third party?

Held : The court upheld that a party can recover damages on behalf of a third party under specific exceptions.

• Dillon LJ stated that generally, a party cannot claim damages for a breach affecting a third party unless acting as an agent or trustee, or if the contract was intended to benefit the third party directly. The case fell into the latter exception, allowing DBC to sue W.

💡Leveluplaw : This case clarifies that parties can claim damages on behalf of third parties if the contract explicitly or implicitly intends to benefit the third party, expanding the scope for such claims.