Case Name: Dunlop Pneumatic Tyre Co. Ltd. v Selfridge & Co. Ltd.

Citation: Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (26 April 1915), [1915] AC 847

Judges: Viscount Haldane LC and Lords Dunedin, Atkinson, Parker of Waddington, Sumner,
and Parmoor.

Name of the petitioner/appellant: Dunlop Pneumatic Tyre Co Ltd

Name of the Respondent: Selfridge & Co Ltd

Facts of the Case:

Dunlop, a tire manufacturing company, made a contract with Dew for sale of tires at a
discounted price on condition that they would not resell the tires at less than the listed price and
that any reseller who wanted to buy them from Dew had to agree not to sell at the lower price
either. Dew sold the tires to Selfridge on the same Price Maintenance Terms, but Selfridge
proceeded to sell the tires below the price he promised to sell them for.

Principle Involved: Privity of contract, The doctrine of privity of contract is a common

law principle which provides that a contract  cannot confer rights or impose obligations upon any
person who is not a party to the contract.

Issues arised:

whether Dunlop had the right to access damages without a contractual relationship

Could Dunlop enforce the selling at or above the list price with the retailer

Petitioner's contention: Selfridge sold the tires below the agreed price and Dunlop sued for
damages and an injunction to prevent them from continuing this activity

Respondents contention: Selfridge argued that Dunlop could not enforce the contract as Dunlop
was not part of the agreement between the dealer and Selfridges. On this basis, the question for
the court was whether Dunlop had the right to access damages without a contractual relationship.

Reasoning: The Lords agree fundamentally with the decision of the Court of Appeal; there was
no contract between Dunlop and Selfridge and therefore Dunlop cannot sue. There are a few
fundamental principles of law underpinning this decision: a) the doctrine of privity, which states
that only a party to a contract can sue in breach of the contract; b) the doctrine of consideration
would require the promisee (Dunlop) to give consideration to Selfridge for the contract to be
completed, and this did not occur as Dunlop did not give anything to Selfridge here (Selfridge
made a promise to Dunlop to only sell at a certain price but it was gratuitous because Dunlop
gave no consideration in return); c) the only way that a principal not named in a contract can be
sued is if he acted as an agent on behalf of one of the parties privy to the contract. Dew was not
acting as an agent for Dunlop, therefore this does not apply in this case. If Dew were Dunlop's
agent, then the effect of the two deals would really be one deal. In an agency agreement, the
Agent disappears and the contract is between the principal (Dunlop) and the third party
(Selfridges) The principal gives tires and the third party gives money. This did not happen here.
The court held that the tires belonged to Dew, not Dunlop. They had already sold them.

Held: The court held in a unanimous decision that Dunlop could not claim for damages in the
circumstances. The court found that firstly, only a party to a contract can claim upon it.
Secondly, Dunlop had not given any consideration to Selfridge and therefore there could be no
binding contract between the parties. Lastly, Dunlop was not listed as an agent within the
contract and could therefore not be included as a valid third-party who had rights to claim on the
contract.

Judgement: The House of Lords held that Dunlop could not claim damages from Selfridge for
selling below its resale price because it had no contractual relationship.
Viscount Haldane, said there were three principles:

 First, the doctrine of privity requires that only a party to a contract can sue.

 Second, the doctrine of consideration requires a person with whom a contract not under
seal is made is only able to enforce it if there is a consideration from the promisee to the
promisor.
 Third, the doctrine of agency requires that a principal not named in the contract
(an undisclosed principal) can only be sued if the promisor was contracted as an agent.
In application to the facts, Haldane could not find consideration between Dunlop and Selfridge,
nor could he find any indication of an agency relationship between Dew and Selfridge, for which
separate consideration from that paid contractually by Selfridge to Dew would need to have been
found. Consequently, Dunlop's action must fail into the jungle.
Lord Dunedin, Lord Atkinson, Lord Parker of Waddington, Lord Sumner, and Lord Parmoor
agreed.
So appeal dismissed.
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