## Facts

- Shanklin Pier Ltd, the owners of a pier, contracted third-party contractors for repairs and painting of the pier, with the right to specify the type of paint to be used.
- Detel Products Ltd approached the pier owners and represented that their paint was suitable for the pier and that two coats would last seven years.
- Relying on Detel's warranty, the pier owners instructed their contractors to purchase and use Detel’s paint.
- The paint failed and began peeling within three months of application.
- The pier owners sued Detel Products Ltd for compensation due to breach of warranty, despite Detel not being a party to the main contract with the contractors.

## Issues

1. Whether a collateral contract existed between Shanklin Pier Ltd and Detel Products Ltd despite the absence of a direct contractual relationship.
2. Whether the representation or warranty by Detel about the paint's durability constituted a legally binding promise enforceable by the pier owners.
3. Whether the instruction by the pier owners to the contractor to buy Detel’s paint amounted to sufficient consideration for the collateral contract.
4. Whether Detel Products Ltd could be held liable for breach of warranty under a collateral contract.

## Decision

- The court held that a collateral contract existed between the pier owners and Detel Products Ltd based on the defendant’s express warranty about the paint.
- The representation by Detel Products Ltd regarding the longevity and suitability of the paint constituted a warranty that induced the pier owners to instruct their contractor to purchase Detel's paint.
- The consideration for the collateral contract was the pier owners’ instruction resulting in the contractor buying the paint, which was deemed a sufficient detriment and benefit.
- Detel Products Ltd was found liable for breach of warranty when the paint failed within months, contrary to the promise.
- Damages were awarded to the pier owners for costs related to repainting and consequential losses.

## Legal Principles

- A collateral contract can exist alongside a main contract, creating enforceable obligations where a warranty or representation induces entry into the primary contract.
- Consideration for a collateral contract may be constituted by the act of entering into a main contract with a third party at the promisor’s inducement.
- Liability for breach of warranty in a collateral contract does not require a direct contractual relationship between the promisor and the claimant.
- Representations made with the intention of being relied upon can give rise to enforceable collateral contracts if acted upon.

## Conclusion

Shanklin Pier Ltd v Detel Products Ltd [1951] established that a collateral contract based on a warranty is enforceable even absent a direct contractual relationship, provided that the promisor’s statements induce entry into the main contract and consideration is present through such inducement. This principle reinforces the enforceability of warranties and collateral arrangements in contract law.


Shanklin Pier Ltd v Detel Products Ltd [1951] 2 KB 854