Keith Mack
The attorney-client privilege is a fundamental tenet of contract law, protecting sensitive communications between lawyers and their clients from compelled disclosure to third parties. This privilege, the oldest recognised by Anglo-American law, is not dependent on an express contract and can exist even without a formal attorney-client relationship. However, it requires diligence from both parties to maintain. While communications are protected, the underlying facts are not, and the privilege does not apply if the purpose is to commit a crime or tort. The common interest privilege, an extension of the attorney-client privilege, allows separate groups of clients and their counsel to communicate confidentially without active litigation. The doctrine of privity of contract is another important concept in contract law, stating that a contract cannot confer rights or impose obligations on non-parties. However, this doctrine has been weakened by legislation like the Contracts (Rights of Third Parties) Act 1999.
| Characteristics | Values |
|---|---|
| Attorney-Client Privilege | The oldest privilege recognized by Anglo-American law, it affords the right to have communications protected from disclosure to third parties. |
| Privity of Contract | A common law principle that a contract cannot confer rights or impose obligations on non-contracting parties. |
| Common Interest Privilege | An extension of attorney-client privilege, it allows separate groups of clients and their counsel to communicate confidentially without active litigation. |
| Attorney-Client Relationship | An express contract is not necessary; the relationship may be implied from conduct. The client must have a "reasonable belief" that the relationship exists. |
| Third-Party Insurance | A third party may claim under an insurance policy made for their benefit, even if they did not pay the premiums. |
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What You'll Learn
Attorney-client privilege
The purpose of attorney-client privilege is to ensure that clients receive accurate and competent legal advice by encouraging full disclosure to their lawyer without fear that the information will be revealed to others. This privilege allows the client to feel secure that their sensitive information will not fall into the wrong hands. The attorney may neither be compelled to nor may they voluntarily disclose matters conveyed in confidence by the client for the purpose of seeking legal counsel.
For the privilege to exist, there are four basic elements that must be present: a communication made between privileged persons in confidence for the purpose of seeking, obtaining, or providing legal assistance. The communication must be intended to be confidential and for the purpose of requesting or receiving legal advice. The attorney-client privilege does not apply to every communication with an attorney. For example, it does not extend to the fact that a consultation occurred or to the general subject matter of the consultation, only to the content of the communications during that consultation. Additionally, if a third party is present during the privileged communication, the confidentiality may be compromised unless that third party is essential to the attorney-client relationship, such as an interpreter.
The waters can become murkier when the client is a business entity, as the invocation of this right by a corporation is more complex than when an individual is involved. In these cases, the courts have employed the subject matter test and the control group test to determine when the attorney-client privilege applies. The current trend, however, focuses on whether the matters discussed are encompassed by the corporate duties and responsibilities of the employee.
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Third-party rights
In the civil law of contracts, a third-party beneficiary is an individual who may have the right to sue on a contract, despite not having originally been an active party to the contract. This right, known as ius quaesitum tertio, arises when the third party is the intended beneficiary of the contract, as opposed to a mere incidental beneficiary.
The Contracts (Rights of Third Parties) Act 1999 introduced a number of allowances and exceptions for ius quaesitum tertio in English law. A right of action arises only when it appears that the object of the contract was to benefit the third party's interests, and the third-party beneficiary has either relied on or accepted the benefit.
There are two types of third-party beneficiaries: an "intentional or intended" beneficiary and an "incidental" beneficiary. When a non-party to a contract receives a benefit from the agreement directly, this is known as an intentional beneficiary. An intended beneficiary is explicitly promised certain benefits in a contract, but they are still not a party to the contract itself. The beneficiary may be named in the contract to have contractual rights, but it is not necessary for them to be identifiable at the time the contract is formed. Nevertheless, they must be referred to in the contract, and the intention to provide a benefit to this third party must be irrevocable.
An incidental beneficiary, on the other hand, is a person whom contracting parties did not intend to benefit when they contracted, but who nonetheless receives benefits. Since an incidental beneficiary is not named in the contract and not intentionally included, they have no rights under the contract and cannot sue for breach of contract. They do not have the right to accept a benefit but rather a mere competency.
Both donee and creditor beneficiaries can enforce contract rights, but to do so, they must be intended beneficiaries. A donee beneficiary benefits from a contract gratuitously, not in exchange for a service they have provided. A creditor beneficiary is a person to whom an obligation is owed by the promisee.
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Common interest privilege
The common interest privilege is an extension of the attorney-client privilege, which protects communications between clients and their attorneys from compelled disclosure to third parties. The common interest privilege allows one group of clients and their counsel to communicate confidentially with another group of clients and their separate counsel without the requirement of active litigation in most courts.
The common interest privilege is often used in coverage disputes, product defect litigation, and insurance disputes. It can be a powerful tool for attorneys, allowing them to keep game-changing documents out of an adversary's hands. However, the validity of the common interest privilege may not be tested until litigation arises, and the specific terminology used to refer to it varies across jurisdictions. For example, it is sometimes referred to as the "joint defense privilege," the "community of interest privilege," or the "joint litigant privilege."
To assert a valid claim for common interest privilege protection, one must establish the fundamental elements of any attorney-client privilege claim. This includes demonstrating that the communication was delivered confidentially, as a communication, by or to counsel (an attorney), by or to a client, and for the purpose of giving or receiving legal assistance.
There is some confusion and inconsistency in how the common interest privilege is defined and enforced across different jurisdictions. For example, some cases indicate that a common interest means an identical interest, while other cases state that something less than identical interests can suffice to trigger the privilege. In addition, the common interest privilege is sometimes confused with the "co-client privilege," which relates to communications between two clients who share the same attorney.
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Privity of contract
The doctrine of privity of contract is a common law principle that stipulates that a contract cannot bestow rights or impose obligations on anyone who is not a party to that contract. In other words, privity of contract occurs only between the parties to the contract, most commonly in the contract for the sale of goods or services. This principle is closely related to the doctrine of consideration, which states that a promise is legally enforceable only if valid consideration has been provided, and the plaintiff is legally entitled to enforce such a promise only if they are the promisee from whom the consideration has moved.
There are two types of privity: horizontal and vertical. Horizontal privity arises when the benefits from a contract are intended for a third party. On the other hand, vertical privity involves a contract between two parties, with one of the parties having a separate contract with another individual or corporation. For example, in a contract between a manufacturer and a distributor, there is no privity of contract between the manufacturer and the end consumer. However, this does not preclude other forms of legal action, as illustrated in the case of Donoghue v. [name unavailable].
The doctrine of privity has faced criticism and has been weakened in some jurisdictions. For instance, in New York State, Judge Cardozo ruled that privity is not required when a manufacturer is aware that a defective product could potentially harm consumers due to its inherent dangers, and there was no additional testing conducted after the initial sale. This ruling set a precedent for product liability law, which has been widely adopted in other jurisdictions. Similarly, in England, Wales, and Northern Ireland, the Contracts (Rights of Third Parties) Act 1999 significantly weakened the doctrine by granting third parties the right to enforce contracts made for their benefit.
Privity is also established in certain substantive legal relationships, such as landlord-tenant relationships, grantor-grantee relationships, and receiving land from a common grantor. In these cases, privity exists because the parties share a substantive mutual interest. When privity of contract is established, it allows parties to seek remedies for breach of contract or enforce the fulfilment of the contract.
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Express and implied contracts
On the other hand, an implied contract is formed by the actions, behaviour, conduct, or circumstances of the parties involved, rather than through explicit verbal or written agreements. In an implied contract, the understanding of an agreement between the parties is inferred from their behaviour or the surrounding context. For example, when you go to a barbershop and get a haircut without discussing the price beforehand, there is an implied agreement that you will pay for the service. Implied contracts can be further categorized into implied-in-fact and implied-in-law contracts. Implied-in-fact contracts occur when parties intend to enter into an agreement and their behaviour aligns with that intention. In contrast, implied-in-law contracts, also known as quasi-contracts, are formed by circumstances rather than intent, and they are used to prevent one party from being unfairly enriched by another.
Both express and implied contracts have legal weight and can be enforced by courts as long as they meet the specific rules and requirements for valid contracts. However, express contracts are generally easier to prove and enforce due to the explicit nature of their terms, which is why they are more commonly used in business transactions. Nonetheless, implied contracts are equally legally binding and are commonly encountered in everyday situations.
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Frequently asked questions
The attorney-client privilege is the right to protect communications between an attorney and a client from disclosure to third parties. This includes business associates, competitors, government agencies, and criminal justice authorities.
The common interest privilege is an extension of the attorney-client privilege, allowing one group of clients and their counsel to communicate confidentially with another group of clients and their separate counsel without the requirement of active litigation.
The doctrine of privity of contract is a common law principle stating that a contract cannot confer rights or impose obligations on anyone who is not a party to the contract. This means that a third party generally cannot enforce a contract to which they are not a party, even if the contract was made for their benefit.
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