privity of contract
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Related to privity of contract: Privity of estate
privity of contractthe relationship between the parties privy to the contract, i.e. those who are direct parties to it. Until the passing of the Contracts (Rights of Third Parties) Act 1999, English law did not permit parties not in a relationship of privity to sue on a contract. Thus, a third party benefited by a contract could not sue on it. The effect of the Act has been to substantially relax this rule, although many contracts seeks to exclude the effect of the Act. Scots law and other civilian systems recognize a JUS QUAESITUM TERTIO.
PRIVITY OF CONTRACT. The relation which subsists between two contracting
parties. Hamm. on Part. 182.
2. From the nature of the covenant entered into by him, a lessee has both privity of contract and of estate; and though by an assignment of his lease he may destroy his privity of estate, still the privity of contract remains, and he is liable on his covenant notwithstanding the assignment. Dougl. 458, 764; Vin. Ab. h.t. 6 How. U. S. R. 60. Vide Privies.