Step 1: Understanding the Concept:
The doctrine of 'privity of contract' states that only the parties to a contract can sue or be sued on it. A third party who is not a party to the contract cannot enforce its terms, even if the contract was made for their benefit. In the context of tort law, this doctrine was historically used to prevent a person from suing a manufacturer for a defective product if they had not bought the product directly from the manufacturer.
Step 2: Detailed Explanation:
- (A) Winterbottom v. Wright (1842): This case is the classic authority for establishing the doctrine of privity of contract in the context of negligence. The court held that the plaintiff, a coach driver who was injured due to a defective coach, could not sue the defendant who had a contract to maintain the coach with the postmaster-general (the plaintiff's employer). There was no contract between the plaintiff and the defendant.
- (B) Donoghue v. Stevenson (1932): This is the landmark case that effectively rejected the privity of contract fallacy as a defense in negligence claims. Mrs. Donoghue fell ill after drinking ginger beer from an opaque bottle that contained the decomposed remains of a snail. She could not sue the retailer as she had not bought the drink herself (her friend had). She sued the manufacturer, Stevenson. The House of Lords, in a groundbreaking decision, held that the manufacturer owed a duty of care to the ultimate consumer, irrespective of any contractual relationship. This established the "neighbour principle" and the modern law of negligence, bypassing the privity of contract barrier.
- (C) Longmeid v. Holiday: This was a pre-Donoghue case that followed the privity rule.
- (D) Heaven v. Pender: This case was an earlier step towards creating a general duty of care but did not fully reject the privity doctrine in the way \textit{Donoghue v. Stevenson} did.
Therefore, \textit{Donoghue v. Stevenson} is the case famous for rejecting the application of the privity of contract doctrine in torts.