Shanklin Pier Ltd v Detel Products Ltd [1951]
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Shanklin Pier Ltd v Detel Products Ltd [1951] 2 KB 854 is a significant judgment in English contract law that addresses the concept of collateral contracts, introducing an exception to the privity of contract rule. The High Court of Justice, King's Bench Division, applied the principle of collateral contracts to establish that a contract can be supported by entering into another contract, allowing for enforcement even by parties not directly involved in the main contract.
Shanklin Pier Ltd engaged a contractor to paint Shanklin Pier. Discussions with Detel Products Ltd took place regarding the suitability of a particular paint, and Detel assured Shanklin Pier Ltd that the paint was suitable and would last for at least seven years. Relying on this assurance, Shanklin Pier Ltd instructed the contractors to use the specified paint. However, the paint began to peel after three months, leading Shanklin Pier to seek compensation from Detel Products.
McNair J delivered the judgment, stating that the case raised a novel question about whether an enforceable warranty could arise between parties not directly involved in the main contract or sale. The judge expressed satisfaction that if a direct contract of purchase and sale of the paint had been made between Shanklin Pier Ltd and Detel Products, the latter would have given warranties as alleged in the statement of claim.
McNair J asserted that an affirmation at the time of sale constitutes a warranty if it was intended as such. He reasoned that if the usual consideration for a warranty is the entering into the main contract related to the warranty, there is no reason why an enforceable warranty could not exist between parties A and B, supported by the consideration that B causes C to enter into a contract with A or performs some other act for the benefit of A. This decision effectively recognised the validity of collateral contracts in certain situations, deviating from the strict privity of contract rule.
Shanklin Pier Ltd engaged a contractor to paint Shanklin Pier. Discussions with Detel Products Ltd took place regarding the suitability of a particular paint, and Detel assured Shanklin Pier Ltd that the paint was suitable and would last for at least seven years. Relying on this assurance, Shanklin Pier Ltd instructed the contractors to use the specified paint. However, the paint began to peel after three months, leading Shanklin Pier to seek compensation from Detel Products.
McNair J delivered the judgment, stating that the case raised a novel question about whether an enforceable warranty could arise between parties not directly involved in the main contract or sale. The judge expressed satisfaction that if a direct contract of purchase and sale of the paint had been made between Shanklin Pier Ltd and Detel Products, the latter would have given warranties as alleged in the statement of claim.
McNair J asserted that an affirmation at the time of sale constitutes a warranty if it was intended as such. He reasoned that if the usual consideration for a warranty is the entering into the main contract related to the warranty, there is no reason why an enforceable warranty could not exist between parties A and B, supported by the consideration that B causes C to enter into a contract with A or performs some other act for the benefit of A. This decision effectively recognised the validity of collateral contracts in certain situations, deviating from the strict privity of contract rule.
