Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980]
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Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277 is an important English contract law case concerning the doctrine of privity of contract and the subsequent modifications brought about by the Contracts (Rights of Third Parties) Act 1999.
Wimpey Investment Development Ltd (Wimpey) had a contract to buy land from Woodar Investment Development Ltd (Woodar) for £850,000. As part of the contract, Wimpey paid £150,000 to a third party, Transworld Trade Ltd. The contract had a clause allowing termination if the government commenced a compulsory purchase. After the government gave notice of its intention to acquire part of the land, Wimpey sought to rescind the contract based on the compulsory acquisition.
Woodar contested this rescission, arguing that it was wrongful and sued for damages. The Court of Appeal, bound by the precedent set in Jackson v Horizon Holidays Ltd, held that Woodar could recover an additional £150,000 that was part of the contract but intended for a third party, Transworld Trade Ltd.
Upon appeal to the House of Lords, it was held by a majority that there had been no repudiatory breach, and Wimpey was entitled to rescind the contract due to the compulsory purchase affecting the site. The Lords, in obiter dicta, discussed the issue of whether Woodar could claim damages on behalf of Transworld Trade Ltd. Lord Wilberforce acknowledged the doubt and difficulty surrounding this question, stating that the factual situation in Woodar was quite different from Jackson v Horizon Holidays Ltd [1975]. Lord Wilberforce reserved his opinion on whether Woodar could recover damages against Wimpey for the benefit of Transworld Trade Ltd.
This case, therefore, adds nuance to the application of the privity doctrine and the extent to which damages can be claimed on behalf of third parties in specific contractual situations. The reservations expressed by Lord Wilberforce highlight the complexity of the issue and the need for careful consideration in cases involving third-party claims.
Wimpey Investment Development Ltd (Wimpey) had a contract to buy land from Woodar Investment Development Ltd (Woodar) for £850,000. As part of the contract, Wimpey paid £150,000 to a third party, Transworld Trade Ltd. The contract had a clause allowing termination if the government commenced a compulsory purchase. After the government gave notice of its intention to acquire part of the land, Wimpey sought to rescind the contract based on the compulsory acquisition.
Woodar contested this rescission, arguing that it was wrongful and sued for damages. The Court of Appeal, bound by the precedent set in Jackson v Horizon Holidays Ltd, held that Woodar could recover an additional £150,000 that was part of the contract but intended for a third party, Transworld Trade Ltd.
Upon appeal to the House of Lords, it was held by a majority that there had been no repudiatory breach, and Wimpey was entitled to rescind the contract due to the compulsory purchase affecting the site. The Lords, in obiter dicta, discussed the issue of whether Woodar could claim damages on behalf of Transworld Trade Ltd. Lord Wilberforce acknowledged the doubt and difficulty surrounding this question, stating that the factual situation in Woodar was quite different from Jackson v Horizon Holidays Ltd [1975]. Lord Wilberforce reserved his opinion on whether Woodar could recover damages against Wimpey for the benefit of Transworld Trade Ltd.
This case, therefore, adds nuance to the application of the privity doctrine and the extent to which damages can be claimed on behalf of third parties in specific contractual situations. The reservations expressed by Lord Wilberforce highlight the complexity of the issue and the need for careful consideration in cases involving third-party claims.
