Audit: Doctrine of Privity and Case Study

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Doctrine of Privity Doctrine of privity of a contract dictates that only parties to a contract will have rights or obligations arising under a contract to hinder the imposition of burdens on and the granting of contractually enforceable rights to third parties. The doctrine constitutes a barrier to freedom of contract that can frustrate the intention of the parties by not allowing them to confer mutually advantageous benefits on third parties, or lead to negative outcomes such as unjust enrichment and the prevention of third parties from justifiably vindicating their rights under the main contract. Therefore, exceptions and alternatives remedies have emerged to overcome situations where the doctrine would lead to an unfair or…show more content…
An invitation to treat may be seen as a request for expressions of interest as per the case of Fisher v Bell (1961). a) As to her legal relationship / obligations to Ben The first scenario states that Ann an antique coin dealer displayed gold plated 1839 five pounds (299g) 86X7 mm coin along with a description for offer at £350’. Ben noticed the offer as he walked past the shop and wanted to buy it. Unfortunately he was running out of time as he has to attend a meeting. After his meeting, he went back to Ann’s shop to ask further questions about the coin. Ben told Ann that he would give a definite answer by Monday. Later that same day, he wrote a letter agreeing to buy the coin at the stated price of £350. On Monday morning, Ann received Ben’s letter before Daisy arrive to make her payments. By virtue of Ann putting the coin on display for sale is merely an invitation to treat as per the case of Fisher v. Bell, whereby the display of a flick knife in a shop is the same. as it was held in the case that by displaying a product is nothing more than an invitation to treat and it is up to the ‘would-be purchaser’ to pick up the goods, in this case is the coin and bring it to the cashier to make an offer as per the case of Pharmaceutical Society of Great Britain v. Boots Cash Chemist. Hereby, it is a humble opinion that on the facts within the first paragraph, there was no offer made in that instant.

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