Charnock v Liverpool Corporation [1968]

Charnock v Liverpool Corporation [1968] 3 All ER 473 is a notable case in English contract law that addresses the issue of collateral contracts and the inference of contractual relationships between parties. The key principle established in this case is that the existence of a collateral contract between a third party and one of the contracting parties is not precluded by the fact that the third party will be indemnified by the other contracting party.

When Charnock's car was damaged, his insurer sent it to be repaired at the Liverpool Corporation's garage. The insurer entered into a contract with Liverpool Corporation to cover the cost of the repairs. Subsequently, Charnock sued Liverpool Corporation for breach of contract, alleging a delay in the repair process. Liverpool Corporation argued that there was no direct contract between them.

The Court of Appeal allowed Charnock's claim, emphasising the existence of a collateral contract between Charnock and Liverpool Corporation for the repair of the car within a reasonable time. Harman LJ stated that when an individual requests a garage to repair their car, and the garage accepts, a contract is formed to carry out the repairs with reasonable skill and within a reasonable time. He highlighted that the knowledge that the insurance company would indemnify the car owner is common in insurance cases, but it does not negate the existence of a separate contract between the car owner and the repairer.

Salmon LJ concurred, asserting that there was a clear contract inferred from the facts between the garage proprietor and the car owner. This implied contract stipulated that, in exchange for the car owner leaving the vehicle with the garage for repair, the garage would undertake the repairs promptly and with due care. Additionally, the payment for the repairs would be made by the insurance company.

In summary, this case underscores that the involvement of a third party's indemnification does not preclude the inference of a collateral contract between the third party and the other contracting party. The decision recognises that, despite the insurer's role, a direct contractual relationship can exist between the car owner and the repairer.
Back to blog
UOL Case Bank

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Yale University
Council of Europe
Baker Mckenzie 
University of Chicago
Columbia University
New York University
University of Michigan 
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law


    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory


    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.