INTRODUCTION-

The term privity of contract begins with the term contract as defined in Section 2(h) of the Indian contract act 1872 which states every agreement enforceable by law is a CONTRACT.

In other words a contract is an agreement between two parties enforceable by law added with some consideration and object.

Privity of contract Meaning and scope Essentials of Privity of contract

The doctrine of privity of a contract states that No stranger is allowed to sue  The rule of privity of contract is basically based on the “Interest theory” which implies that the only person having an interest in the contract is entitled as per law to protect his rights and confer obligation to other.

ILLUSTRATION-

If Shyam makes a promise to deliver goods to ramesh. Then in this case, if shyam breaches the contract then only ramesh has a right to prosecute him and no other person can prosecute him.

Essentials of Privity of contract

1. There must be two parties.
2. Both the Parties must be competent and there must be a valid consideration.
3. There must be Breach of contract by one Party for application of the doctrine of privity of contract.
4. Only parties to contract can sue each other.

Exceptions–

1 Creation of trust.

2 Marriage and family settlement.

3 Acknowledgment

4 Assignment of contract

5 Contract through agent

6 Beneficiary.