Contract Law

Privity of Contract Explained

Privity of Contract Explained

November 30
00:00 -0001

Privity of Contract Explained

Privity of contract is a legal
doctrine that holds that a business contract, along with any other type of
contract, may not confer rights or impose obligations to any person or agent
except for the specific parties that have formed the contract.

Privity of contract is most
commonly an issue which arises during business contracts that have been formed
to allow for the sale of goods or services. Horizontal privity of contract
becomes an issue when the benefits bestowed by a contract are given to a third
party or a party that was not a part of the original contract. Vertical privity
of contract involves an independent contract that develops between one signer
of the original contract and another individual or other legal entity.

There are certain circumstances
under which privity of contract may be set aside which will allow the legal
entity who is not directly a part of the business contract to be allowed to sue
to force a party to the original contract to uphold their obligations. Privity
of contract will only allow a third party to the contract to go against one of
the original parties to the contract beyond the ability to collect the third
party’s entitlement to a benefit under the contract.


About Author



Related Articles

Popular In Contract Law

No posts where found

Contract Law News

Government Files Lawsuit against Fluor CompaniesGovernment Files Lawsuit against Fluor Companies On November 8, 2012, the Department of Justice announced that the United States government is intervening in a case against Fluor Corporation and its subsidiary, Fluor Hanford Inc, after the Texas-based companies used federal funds for lobbying activity.

Guide To: Contract Law Lawyers

Guide to Finding Business LawyerGuide to Finding Business Lawyer How do I find a Business Lawyer?Business lawyers are essential for commercial enterprises to ensure that they remain knowledgeable of the laws regulating their business and protecting their assets from liability.
Guide to Finding Contract LawyerGuide to Finding Contract Lawyer A contract lawyer is a unique arrangement that has lawyers working as temps by the terms of contract agreed upon by the client and the lawyer or lawyer temp agency.