Lloyds v Harper (1880) 16 Ch D 290

Facts

• The case concerned the enforcement of a covenant made in a deed relating to property use.
• The plaintiff, as original covenantee, sought to enforce a covenant against the defendant after the benefit of the covenant had been assigned to a third party.
• The covenant touched and concerned the land and was created in a property transaction.
• The dispute centered on whether the original covenantee retained the right to enforce the covenant even after its benefit was assigned.

Issues

1. Whether the original covenantee could enforce a covenant directly against the covenantor after assigning its benefit to a third party.
2. Under what conditions direct action by the original covenantee is permissible when the covenant relates to property.
3. Whether enforcing the covenant after assignment would prejudice the rights of third parties who acquired an interest in the property.

Decision

• The court held that the original covenantee retained the right to enforce the covenant against the covenantor, provided certain requirements were met.
• It was found that the covenant touched and concerned the land and there was privity of estate between the original parties.
• Direct enforcement was permitted as long as it did not prejudice the rights of third parties who had acquired interests in the property.
• The intention of the original parties to allow enforcement by the original covenantee was respected.

Legal Principles

• A covenant may be enforced by the original covenantee against the covenantor even after the benefit is assigned to a third party, under certain conditions.
• There must be a valid and enforceable covenant created by deed, touching and concerning the land.
• Privity of estate between the original parties is required.
• The assignment of the benefit must be lawful and properly executed.
• Rights of third parties must not be prejudiced by such enforcement.
• The doctrine of privity of contract generally limits enforcement to parties but allows exceptions for covenants running with the land.

Conclusion

Lloyds v Harper (1880) 16 Ch D 290 is a significant case clarifying that original covenantees may enforce covenants notwithstanding assignment, so long as conditions concerning privity, the nature of the covenant, and the protection of third-party rights are satisfied. This decision remains a fundamental point of reference in the law of contract and property regarding the enforcement of covenants.