Privity of contract is the relationship that exists between the parties to an agreement. This relationship is necessary in contracts; therefore, if you want to lodge a suit regarding a contract, you need to prove that you and the other individual were in privity of contract; hence, you were both involved in the contract and had an established contractual relationship. In addition, a doctrine of contract law that precludes any person from seeking the enforcement of a contract, or suing on its terms, unless they are a party to that contract.
As a general rule, contractual rights and liabilities affect only the parties to the contract and a person who is not party can neither sue nor be sued on the contract (Ainah, 2005) A contract cannot usually …show more content…
It is one involving either of them and a third party. A definitive instance of this happened in England in 1953 in the case of Shanklin Pier v. Detel Products Ltd. In this case Shanklin Pier (plaintiff) employed contractors to paint a pier. The contractors then instructed Detel Products to supply them paint. This statement was made based on a statement made by the defendants to the plaintiffs that the paint would hold out for seven years. When after just three months the paint work fell apart, the plaintiff sued and was granted the go ahead by the courts to go along with the case against the defendant because even though the main contract had been between the declarer and the defendant there was in existence a collateral contract between the complainant and the defendant guaranteeing seven years …show more content…
As a consequence of the doctrine of privity, the person who bore the red ink (i.e. the third party) cannot sue, whereas the person who has suffered no loss (i.e. The promise) can sue, but may only be able to obtain nominal damages. For instance, where the breach of a contract consists of a failure to perform in favor of a third party, unless the promise also suffers some loss as a consequence of the break, the damages awarded would generally only be token. Where a contract is established for the benefit of a third party, the promise has normally no claim to the money or other performance properly due to the third party. In some instances, the tribunals have granted the promise with specific performance, but such a remedy will not be usable in every shell. Further, even in those instances where substantial damages or specific performance may be available, the promise, may not be able to, or wish to, sue the
As a general rule, contractual rights and liabilities affect only the parties to the contract and a person who is not party can neither sue nor be sued on the contract (Ainah, 2005) A contract cannot usually …show more content…
It is one involving either of them and a third party. A definitive instance of this happened in England in 1953 in the case of Shanklin Pier v. Detel Products Ltd. In this case Shanklin Pier (plaintiff) employed contractors to paint a pier. The contractors then instructed Detel Products to supply them paint. This statement was made based on a statement made by the defendants to the plaintiffs that the paint would hold out for seven years. When after just three months the paint work fell apart, the plaintiff sued and was granted the go ahead by the courts to go along with the case against the defendant because even though the main contract had been between the declarer and the defendant there was in existence a collateral contract between the complainant and the defendant guaranteeing seven years …show more content…
As a consequence of the doctrine of privity, the person who bore the red ink (i.e. the third party) cannot sue, whereas the person who has suffered no loss (i.e. The promise) can sue, but may only be able to obtain nominal damages. For instance, where the breach of a contract consists of a failure to perform in favor of a third party, unless the promise also suffers some loss as a consequence of the break, the damages awarded would generally only be token. Where a contract is established for the benefit of a third party, the promise has normally no claim to the money or other performance properly due to the third party. In some instances, the tribunals have granted the promise with specific performance, but such a remedy will not be usable in every shell. Further, even in those instances where substantial damages or specific performance may be available, the promise, may not be able to, or wish to, sue the