The Indian Contract Act, 1872 governs all the commercial agreements and business transactions we have in our day-to-day life. The primary object of the Act is to honour our legal rights and obligations that arise out of a contract. It also guarantees legal remedies in case anybody abuses our contractual rights. Hence, having a clear idea about Laws relating to Contracts can help you avoid falling prey to difficult circumstances. Nonetheless, you can always get the assistance of the best lawyers in India who are proficient in dealing with Contract matters.
As you gather knowledge about the Law of Contract, you must know its essential provisions; one of such is the doctrine of privity of contract.
Privity of Contract: What it is?
The Doctrine of Privity of Contract means that only those persons who are parties to the contract can bring a suit against the other and can enforce their rights and obligations. However, a person who is a stranger to the contract cannot bring any legal action, even if the contract was entered into for their benefit.
Let's say, for example, Raja has entered into a contract with Abir to stay as a tenant at Abir's house for rent. Abir decided to use that rent for treating his mother Uma's illness. Now Uma, the mother of Abir, cannot sue Raja for eviction if he fails to give the rent. Only Abir and Raja, being the parties to the contract, can bring legal action against each other but no third party to the contract can.
Exceptions to the Doctrine
There are few exceptions to the Doctrine of Privity of Contract, where you can sue the parties to the contract even if you are a third party or stranger. Here they are:
- Where a particular contract creates a property right in your favour, you can sue the parties even if you are a stranger to the contract.
- In some circumstances, even if there is no contract between the parties, but one of them has recognised your right as a stranger through their conduct, you can bring legal action to establish your right.
- If a family contract creates a provision to secure your rights as a beneficiary, you can enforce the same even if you are a third party to the contract.
FAQs
Our family deed makes a provision for my higher studies, but my brothers violated that provision; can I sue them?
Yes, you can sue your brothers even if you are a stranger to the contract.
My son bought a machine from a person under contract, but it is not working. Can I sue the person in favour of my son?
No. You cannot sue the person as you are a third party to the contract.
Is a verbal contract valid?
Yes, it is valid. But, proving it is not easy.
Conclusion:
Over time, the law has become more relaxed, and now a strangers can claim damages if they can prove that someone has violated their legal right. Consult the top-ranking lawyers in India to get the fastest relief.
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