Contracts II, Pages 1212–1215

British Waggon Co. v. Lea & Co.

Court of Queen's Bench, 1880

Defendant's Argument:

The contract ended because Parkgate voluntarily liquidated itself and assigned the contract to British Waggon, which did not have privity.

Facts:

Plaintiff Parkgate loaned defendant one hundred railway wagons for seven years for £625 per year. As part of the contract, Parkgate agreed to maintain the wagons for defendant. Later that year, Parkgate began to liquidate and dissolve itself. As part of its liquidation, Parkgate assigned and transferred the the contracts with defendant to plaintiff British Waggon. British Waggon took over the repairing stations and the staff employed therefor. British Waggon has since performed all repairs for defendant, but under a special agreement without prejudice to their rights. Plaintiff sued for unpaid rent.

Issue:

Was Parkgate allowed to delegate its obligations to defendant to British Waggon?

Rule:

Contracts where personal performance is the essence thereof—where a person selects another with reference to his skill, competency, or other personal qualification—cannot be delegated.

Reasoning:

  • Parkgate still exists as long the wagons are letted, so the fact that it liquidated itself is irrelevant.

  • While contracts based on personal performance cannot be delegated, it is not assumed that during negotiations defendant attached any importance to whom the repairs were done by. It just wanted the wagons repaired. If the wagons get adequately repaired, it is not a departure from the contract to have someone else do them.

Judgment:

Judgment for plaintiffs.

Rule/Holding:

If it is not important that the obligations be performed by a specific person, they are delegable.