In the basics of Contract law, there states a rule that there can be no strangers to a contract but the Doctrine of Privity of Contract gives a greater definition to this rule. Privity of Contract is a legal principle regulating who is entitled to execute a contract between two parties. The privity of contract doctrine is a fairly straightforward concept with immense consequences. It defines the relationship between the parties to a contract, in essence. This theory of common law states that only those who have signed it can impose contractual rights and obligations. If a party signs a contract, those terms are legally bound by it; that's the whole point of a contract. Someone who is not privy to a contract, however, can not enforce it legally. If a party to a contract decides to impose certain conditions, they can normally do so only if they have contractual privacy with the other party (i.e. the contracting party). Both written and oral contracts apply to this doctrine in contract law. The Indian Act of Contract. 1872, requires a third-party 'Consideration' for an agreement to continue. A stranger (third-party) to consideration, however, is different from a stranger to an agreement. The law would not authorize a foreigner to file a contract case. In the following situations, a stranger or a person who is not a party to a contract may sue for a contract:
If a contract is made for the benefit of a person, even though he is not a party to the contract, he may sue upon the contract. It should be noted here that life insurance policy candidates do not have this privilege.
If a contract is concluded between the trustee of a trust and another person, the trusted recipient can, even if he is a stranger to the contract, sue by enforcing his right under the trust.
If a contract is made under a family arrangement for the benefit of a stranger (a person not a party to the contract), the stranger may sue in his own right as a beneficiary of the contract.
It becomes a contractual obligation for the party to pay the third party if a contract allows a party to pay a certain amount to a third party and he/she accepts it. It may also mean recognition.
If a person buys a piece of land with the notice that the owner of the land is bound by all duties and obligations concerning the land, even though he was not a party to the deal, he may sue a contract between the former landowner and a settler.
If through an attorney, a person enters into a contract, the agent acts within the limits of his authority and on behalf of the principal. This exception can be traced from the case of Dunlop Pneumatic Tyre Company Ltd, i.e. if the promisee really contracted as his agent, a principal not named in the contract may sue him, and consideration in the case was directed in the capacity of an agent directly or through the promisee.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.
