King v David Allen [1916]

Orthodox view – contractual licenses not binding on
third parties.
Licensor gave licensee exclusive permission to affix
ads to wall of cinema.
Licensor later leased cinema to third party.
Lease contained no mention of licence.
Third party refused to allow ads to be fixed to
Licensee brought action against licensor for breach of
House of Lords held that by leasing to the cinema
company, the licensor had breached an implied undertaking not to disable itself
from carrying out contract with licensee.
Licensor had deprived licensee of his contractual
right to affix ads.
Awarded damages.
But note contractual license not binding on third party.
Licensee restricted to action for damages against
other party to contract.
So this case represents orthodox view that contractual
licenses are personal and cannot bind a third party purchaser of an interest in
the land.