D supplied tyres to a wholesaler X, on a condition that any retailer to whom X re-supplied the tyres, the retailer should promise X not to sell them to the public below D's price list. X supplied tyres to F upon this con

CS Executive · Jurisprudence, Interpretation and General Laws · PYQS · December 2024
D supplied tyres to a wholesaler X, on a condition that any retailer to whom X re-supplied the tyres, the retailer should promise X not to sell them to the public below D's price list. X supplied tyres to F upon this condition only, but nevertheless F sold the tyres below D's price list. Discuss the legality of the case, if D claims any damages from F.

Answer & Explanation:

A stranger to a contract cannot sue both under English and Indian law for want of privity of contract. Accordingly, a person who is not a party to a contract cannot sue upon it even though the contract is for his benefit. In the given situation: D supplied tyres to wholesaler X with a condition that X's retailers (like F) would not sell below D's price list. X supplied tyres to F with this condition. F sold the tyres below D's price list. Legality of the case if D claims damages from F: There was a contract between D and X, and a separate contract between X and F. D was not a party to the contract between X and F. D cannot claim damages from F because only a party to the contract can claim it. D had not given any consideration to F, and therefore there was no binding contract between D and F. D was not listed as an agent within the contract between X and F and therefore could not be included as a valid third party who had rights to claim on the contract. Conclusion: D will not be able to claim damages from F in the given circumstances due to the doctrine of privity of contract.

Topics: Indian Contract Act, 1872

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