Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915]

Court: House of Lords

Facts: Dunlop, a tyre manufacturer, enforced a resale price maintenance agreement with its dealers, including Dew & Co, who were to ensure that their retailers, such as Selfridge, adhered to the recommended retail price. Selfridge sold below this price, leading Dunlop to sue for damages despite not having a direct contract with Selfridge.

Issue: Can a third party enforce a contract term when they are not a direct party to the contract, under the doctrine of privity?

Held: The House of Lords held that Dunlop could not claim damages from Selfridge due to the absence of a direct contractual relationship. The court found no consideration between Dunlop and Selfridge and no agency relationship that would allow Dunlop to enforce the terms of the agreement.

Key Judicial Statement: The House of Lords stated, "The doctrine of privity of contract prevents a third party from enforcing terms of a contract unless they are a party to it or have an agency relationship."

💡Leveluplaw: The doctrine of privity of contract limits enforcement of contractual terms to parties directly involved in the contract. This case underscores the constraints of privity, impacting modern views on competition and resale price maintenance agreements.