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Paisley Paint Suppliers assured Fort Bridge that the industrial paint they supplied would last for at least five years. On the basis of this assurance, Fort Bridge entered into a contract with Pete's Painters to paint Fort Bridge's Victorian iron rail bridge, and instructed Pete's Painters to use Paisley's paint. Pete's Painters bought the paint from Paisley, as instructed, but after the project was completed, Fort Bridge discovered that the paint was already beginning to peel after just a couple of months. 

Can Fort Bridge claim compensation directly from Paisley Paint Suppliers under these circumstances?

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Fort Bridge could recover on the basis of a collateral contract. The consideration for the promise regarding the paint's durability was Fort Bridge's instruction to Pete's Painters to purchase the paint from Paisley Paint Suppliers. In Shanklin Pier v Detel Products Ltd [1951] 2 KB 854, the court held that a collateral contract existed where the plaintiff, relying on the defendant's assurance, instructed a contractor to purchase the paint. The consideration for the promise was the instruction to buy the paint from the specific supplier. 

Key Point: A collateral contract can exist when an assurance is given to one party who relies on it to instruct another party to enter into a contract with the supplier. This creates enforceable obligations even if the party benefiting from the assurance is not a direct party to the primary contract.

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