Exceptions to Privity of Contract You Didn't Know About!

The constitution of India has over 1200 laws, finding itself into both central and state laws. Of course, we don't expect you to know all of them but to be acquainted with a few significant ones may come in handy for you. The Indian Contract Act, 1872 is one among them which is governed by the doctrine of privity of contract. According to this, only the parties of the contract are allowed to prosecute each other and no third party or an outsider is bestowed with the right to do the same. This doctrine is based on 'interest theory' which states that only the interested parties in the contract are eligible to sue each other. However, with time this doctrine has gradually undergone changes offering its new implications.

Before jumping on to the exceptions, let's have look at the type of privity to establish an improved understanding:

• Horizontal Privity: This comes up when the benefits of the contract are enjoyed by a third party who is not a part of the contract.
• Vertical Privity: It is signed between the party who makes the covenant and the party to whom the property would be transferred.

Here are the few exceptions to the doctrine of privity of contract that you need to be aware of:

• Legatee under a contract

In case of a contract between two parties that advantages the third party, then in the failure of any of the two parties the latter has the right to sue them both.

• Behavior, Acknowledgment or Acceptance

There may be a situation when two or three parties can enter a contract without the doctrine of privity. However, in such a case where one of the parties realizes the right of the other he may be liable to the law.

• A party that is outside of the contract can also sue on the contract. This is possible under the following circumstances such as trust, family settlement, and so on.
• If there arises a case of personal injury due to negligence, the third party may sue the negligent party.
• In the case of goods, a third party can sue the seller if the former receives defective goods from the latter.

With due course of time, the changes in privity of the contract have provided rights to third parties under exceptional conditions that in turn help them get justice in the right way. For more free legal advice similar to this to add to your knowledge, you just need to look for the best law services that provide quality information and assistance. Now that you are well informed about the privity of contract and the exceptions, build your case better by signing yourself up for free legal advice today and know your rights better before anyone sues you! The more efficient the assistance, better your case will be.

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