A consumer who does not have a direct contractual relationship with the manufacturer is not entitled to sue the latter as a general rule under tort and contract law. The only circumstance in which a claimant may sue for damage caused by a defective product is when it causes physical harm to the person raising the claim and economic loss or monetary loss is not recoverable by the plaintiff. The Winterbottom case is the landmark authority for the “privity of contract” requirement under English Law for the recovery in negligence against a manufacturer due to a defective product. The plaintiff in the case was a mailman who used a vehicle to deliver mail and had an employment contract with a postmaster general who in turn contracted with the defendant, a coach manufacturer. The coach became defective due to a latent defects with the coach and as a result the plaintiff became “lamed for life”. The plaintiff raised a claim against the the coach manufacturer, yet failed. In rejecting the plaintiff’s suit, the Court of Exchequer stressed the absence of privity of contract between the plaintiff and the defendant.
Per Lord Abinger’s opinion, “if the plaintiff can sue, every passenger, or even any person passing along the road, who was injured by the upsetting of the coach, might bring a similar action. Unless we confine the operation of such contracts as this to the parties who entered into them, the most absurd and outrageous consequences, to which I can see no limit, would ensue. “
The Contracts (Rights of Third Parties) Act 1999 in its Section 1(1) states that a party has the right to enforce a contract term provided that;
“1)(a) … the contract expressly provides that he may; or (b) subject to s.1(2) the term purports to confer a benefit on the third party.” Under s.1(3)in order for the consumer to take advantage of the above stated provision the third party, “must be expressly identified in the contract by name, as a member of a class answering a particular description but need not be in existence when the contract is entered into.”
The question is whether a third party, the consumer, who is not a party to the original contract that is concluded between two parties, for example manufacturer and the retailer, can be afforded benefit of the contract?
The EU commission has expressed its views on this matter by stating that a consumer should not be given the possibility of cutting across chains of sales contracts so as to enforce a manufacturer’s quality promise. The Commission’s report should be afforded some weight since there would be “serious problems if we were to apply the1999 Act so as, e.g. to extend the benefit of a manufacturer's contract with its immediate purchaser to the ultimate consumer.” A manufacturer's promises on which a buyer relies in entering into the contract of sale can, of course, give rise to collateral contracts-A written warranty may be given by the manufacturer stating that the provisions of the 1999 Act apply and then the consumer may directly enforce the warranty terms, yet the manufacturer is under no such legal obligation to provide the consumer with a warranty. A written warranty means :“(b) any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time, or(c) any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking …”
The only time that a consumer may seek damages for the breach of a conformity of a product is when the supplier, warrantor, or service contractor fail to comply with any obligation under a written warranty, implied warranty, or [they] may bring suit for damages and other legal and equitable relief Yet, a manufacturer may also delimit his scope of liability by use of disclaimer stating that once the retailer as accepted the goods he will not be entitled to return them or seek a remedy vis-à-vis the manufacturer.
However some may argue that the dealer is a mere conduit between the manufacturer and the consumer, and the consumer may only seek a remedy against the manufacturer where the dealer [webshop] has gone into liquidation.
” Courts and scholars alike have recognized that the typical consumer does not deal at arms length with the party whose product he buys. Rather, he buys from a retail merchant who is usually little more than an economic conduit. It is not the merchant who has defectively manufactured the product. Nor is it usually the merchant who advertises the product on such a large scale as to attract consumers. We have in our society literally scores of large, financially responsible manufacturers who place their wares in the stream of commerce not only with the realization, but with the avowed purpose, that these goods will find their way into the hands of the consumer. Only the consumer will use these products; only the consumer will be injured by them if they prove defective.”
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