Beswick v Beswick [1968] AC 58 (HL)

Facts

• Peter Beswick, a coal merchant, entered into an agreement with his nephew, John Beswick, to transfer his business in exchange for weekly payments to Peter during his life and, after his death, to Peter’s wife, Ruth Beswick.
• After Peter’s death, John ceased making the payments to Ruth, asserting that she was not a party to the contract and therefore lacked standing to enforce it.
• Ruth Beswick brought proceedings as administratrix of Peter's estate to enforce the contract, seeking to obtain the payments that John had agreed to make.

Issues

1. Whether Ruth Beswick, as a third party, could enforce the contractual terms benefiting her despite not being a party to the agreement (the privity of contract issue).
2. Whether specific performance was an appropriate remedy to enforce the contractual obligation for the benefit of Ruth Beswick.

Decision

• The House of Lords held that Ruth Beswick could enforce the contract in her capacity as administratrix of Peter’s estate.
• The court determined that, while the privity of contract doctrine generally prevents third-party enforcement, equitable remedies—especially specific performance—could be used in certain cases for intended beneficiaries.
• The court recognized that specific performance was appropriate when monetary damages were inadequate, enabling the enforcement of the contract's terms for Ruth's benefit.

Legal Principles

• The doctrine of privity of contract stipulates that only parties to a contract may sue or be sued on it, generally excluding third parties from enforcement.
• Legislative and judicial criticism of privity's rigidity has acknowledged its potential to yield inequitable outcomes for intended third-party beneficiaries.
• Specific performance is an equitable remedy available where monetary damages are insufficient, and it may be ordered to enforce contractual obligations for the benefit of a third party in appropriate circumstances.

Conclusion

Beswick v Beswick established that, although the privity of contract doctrine bars third-party enforcement, equitable relief such as specific performance can allow an intended beneficiary to secure contractual obligations. The decision clarified important limits and exceptions in English contract law and influenced the evolution of statutory rights for third-party beneficiaries.