Contract Law & Dispute Resolution: Privity of Contract Case Analysis

This case study examines several issues arising from a contract dispute involving Valentina, Horatio, the Royal Albert Hall, and the Royal School of Acting. It analyzes whether Valentina can sue the Royal Albert Hall under Horatio's hire contract, concluding she cannot due to lack of contractual involvement. It further explores whether Horatio can sue the Royal School of Acting under Valentina's education contract, determining he cannot sue under that specific contract but may have grounds based on their initial agreement. The analysis also addresses Horatio's potential claim against the Royal Albert Hall for his deposit, suggesting he can claim damages due to the Hall's failure to fulfill the contract. Finally, it clarifies that Valentina owes no damages to any party, as she was not a party to the contracts in question. The analysis is based on Contract Law principles and relevant case law.

Running head: CONTRACT LAW
Contract Law
Name of the Student
Name of the University
Author note

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 The issue in this situation is whether Valentina will have the rights to sue the Royal
Albert Hall under the Horatio’s hire contract as per the Contract Act.
The background of the case states that Valentina’s godfather entered into a hire
contract with the Royal Albert Hall if the Royal School of Acting accepts in casting
her in the production of My Fair Lady. The Royal School of Acting had agreed with
the proposal, which was offered by Horatio and therefore, he hired the hall for
Valentia.
In such a scenario, it can be stated that Valentina will have no rights in suing the
Royal Albert Hall under Horatio’s hire contract because she did not enter in to the
contract1. The essentials of a valid contract as per the Contract Law are applicable in.
Valentina did not form a valid contract with the Royal Albert Hall. However, Horatio
was one of the parties in forming the contract with it. For a contract to be valid, one
party must make an offer2. Therefore, if there is no offer, a contract cannot be
constituted. To make an offer, there must be another party present for accepting the
offer produced. An offer is treated to be different from that of an advertisement. A
contract can only be formed legally if there are two or more parties involved with it.
Secondly, the party to whom the offer is made must accept the offer. When one party
is clear with content of the offer, they would make an acceptance once they are clear
about it. A contract can either be in an oral or written form3. Thereafter, consideration
plays a significant role in the formation of a contract. This defines that a contract is
created between two parties based on a consideration. Without any kind of
consideration, contract will not be considered to be legal. In this given scenario, it can
1 Smits, Jan M., ed. Contract law: a comparative introduction. Edward Elgar Publishing, 2017.
2 Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases and materials.
Wolters Kluwer Law & Business, 2016.
3 Plant, Owned, and Hired-in Plant. "Schedule-Tradesman Insurance Essentials." Policy 4 (2017): 6LP.

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be observed that there was a consideration between the parties regarding Valentina
acting for the play My fair Lady. Fourthly, the parties involved in a contract must
have the intention to create legal relations4. The parties will have a common intention
for creating the contract. Fifthly, the terms and clauses mentioned in the contract must
be precise and clear for the parties to comprehend about the nature of the contract.
Lastly, both the parties must have attained the age of 18 to form the contract5. Minors
are not capable to form a legally valid contract with another party. Gibson v
Manchester City Council shows how significant the essential elements are for forming
a contract. Therefore, Horatio and the Hall fulfilled these elements and Valentina did
not act as one of the parties in the formation of a contract.
The Contract Act, majorly discusses the basic elements as without it a contract
cannot be formed. It can be stated that as per the Act, the parties involved in the
contract does not include Valentina. She has no right to sue the Hall if it has cancelled
the production since less number of tickets was sold. Such a scenario was observed in
the case of Clifton v Palumbo.
 The issue and matter of this situation is whether Horatio can sue the Royal School of
Acting under the education contract of Valentina.
It can be observed that from the scenario that there was an agreement that was
formed between the Horatio and the Royal School of Acting. This will also be treated
under the Contract Act as an agreement or a contract is generally formed based on the
constituents of a valid contract. The essentials of the Contract were formed between
these two parties but Horatio cannot sue the school under the education contract of
Valentina. The education contract was formed between Valentina and the School,
4 Kötz, Hein. European contract law. Oxford University Press, 2017.
5 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.

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therefore, Horatio cannot use the educational contract for suing the Royal School of
Acting. If Horatio wants to sue the School, he can based on the agreement that was
formed between the two of them. As per the Contract Act, the parties can sue each
other only when they are involved in it and not based on some other contract where
they are not a part.
If the agreement is legally formed between the parties then they will be
inherited with the power to sue each other. Contract Law states that the persons
involved in the argument will only be liable for the acts of each other. However, both
Horatio and the Royal School of Acting had formed an agreement on the
consideration that his god-daughter Valentina should be casted as Eliza in the
production of My Fair Lady. The School had accepted the such consideration due to
which Horatio had decided to hire the Royal Albert Hall. However, that did not take
place since the Hall had cancelled the production because there was a situation of
poor ticket sales and that lead to Horatio lose his deposit money.
Brennan v Lockyer focuses on the points that have been discussed in this
scenario. It can be observed from the facts that there was a clear agreement made
between the parties. The education contract of Valentina need not be used as he can
directly sue the School and take actions for what it had done6. Although the School
did not breach the contract, instead it fulfilled the elements of the agreement as was
promised.
It can be concluded stating that as per the Contract Law, Horatio will have no
power to sue the School under the education contract of Valentina. This is because he
was not a part of the contract that was made by School and Valentina.
6 Pargendler, Mariana. "The Role of the State in Contract Law: The Common-Civil Law Divide." YALE
JOURNAL OF INTERNATIONAL LAW 43 (2016): 143.

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 The question that has arose in this scenario is that whether Horatio can claim anything
from the Hall.
A contract generally diminishes when the obligations of the parties under a validly
formed contract ends. If of the party causes any kind of damage to the other party, he or
she will be liable to compensate for the damages caused to him7. It was observed in the
case of Cutter V Powell. According to the Contract Law, one of the parties is liable to pay
the other if either of them has failed to act as per the contract. The contract that was
created between them was a legal one and therefore one of the parties failed to fulfill the
requirements of the contract as they had decided8.
In this given case study, it can be observed that the Royal Albert Hall failed to carry
out its activities as was mentioned in the facts due to the sale of poor tickets. Horatio can
claim for his money that he had deposited in the Hall for the show of Valentina. he
purposes for which damages are made in a civil suit, focusing on: (1) compensatory
damages; (2) exemplary and punitive damages; and (3) Restitutionary damages. In this
course work we will examine the role of compensation and vindication in contract and
tort damages. Compensatory damages are awarded to compensate the claimant for the
loss of right. However, there are certain situations where compensatory damages have
little significance. Vindication describes the making good of a right by the award of an
adequate remedy. It can be argued that, while the primary purpose of compensation is to
provide an indemnity for loss, an award of compensatory damages will nevertheless
generally vindicate the right to performance of the contrac9t. However, the courts should
7 Andrews, Neil. Contract law. Cambridge University Press, 2015.
8 Fried, Charles. Contract as promise: A theory of contractual obligation. Oxford University Press, USA, 2015.
9 Schwartz, Alan, and Robert E. Scott. "The Common Law of Contract and the Default Rule Project." Va. L.
Rev. 102 (2016): 1523.

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confine themselves to awarding compensation for loss or damage due to wrongful
conduct and the vindication of rights, and punitive awards should be avoided10.
It can be concluded stating that Horatio can claim for the damages from the Hall as he
had submitted the deposit money for a particular reason.
 The issue in this matter is regarding the damages that Valentina can owe to any of the
parties.
It can be observed from the facts of the case study that there are no such
damages that Valentina owes to the Hall or the School. The Royal Albert Hall is the
only party that owed to Horatio. Only he can claim for compensation from the hall as
he had deposited an amount to the Hall for his god-daughter Valentina. The Contract
Act discusses the damages for which the party that failed to carry out the duties will
be held liable.
Valentina was not involved in the scenario as he she was not the one who had
entered into the contracts. Therefore, she will not be liable for any of the damages
caused to any party11. The only party who can be held liable for the acts is the Royal
Albert Hall. The Hall should recover the damages of Horatio as it owed the deposit
money.
It can be concluded stating that as per the Contract Law, the persons involved
in the Contract or the agreement can only be held liable for his or her acts12.
Revocation of a contract defines such a situation under the Contract Law.
10 Barnett, Randy E., and Nathan B. Oman. Contracts: Cases and Doctrine. Wolters Kluwer Law & Business,
2016.
11 Andrews, Neil. Contract law. Cambridge University Press, 2015.
12 Dressler, Joshua. "Problem in the Contract Law Bundle PAC." (2015).

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References:
Andrews, Neil. Contract law. Cambridge University Press, 2015.
Barnett, Randy E., and Nathan B. Oman. Contracts: Cases and Doctrine. Wolters Kluwer
Law & Business, 2016.
Dressler, Joshua. "Problem in the Contract Law Bundle PAC." (2015).
Fried, Charles. Contract as promise: A theory of contractual obligation. Oxford University
Press, USA, 2015.
Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law:
cases and materials. Wolters Kluwer Law & Business, 2016.
Kötz, Hein. European contract law. Oxford University Press, 2017.
McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK),
2014.
Pargendler, Mariana. "The Role of the State in Contract Law: The Common-Civil Law
Divide." YALE JOURNAL OF INTERNATIONAL LAW 43 (2016): 143.
Plant, Owned, and Hired-in Plant. "Schedule-Tradesman Insurance Essentials." Policy 4
(2017): 6LP.
Schwartz, Alan, and Robert E. Scott. "The Common Law of Contract and the Default Rule
Project." Va. L. Rev. 102 (2016): 1523.
Smits, Jan M., ed. Contract law: a comparative introduction. Edward Elgar Publishing, 2017.