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Explain the meaning of the term “privity of contract” and outline the exceptions to that rule.

      

Explain the meaning of the term “privity of contract” and outline the exceptions to that
rule.

  

Answers


Maurice
This phrase means that only a person who is party to contract can sue or be sued on it.
Dunlop V. Selfridge.

It means that by providing consideration a person becomes party to a contract. Tweddle
V.Atkinson.

It means that a stranger to a contract cannot sue or be sued on it even if it was entered into
for his benefit Scruttons Ltd V. Midland Sillicones Ltd.

However there are several exceptions to this rule where persons who have not provided
consideration or are not privy to a contract can sue or be sued on it.
(i) Agency relationship.

(ii) Legal assignment.

(iii) Trust relationship.

(iv) Covenants running with land.

(v) Third Party motor insurance.

(vi) Negotiable instruments.
maurice.mutuku answered the question on April 28, 2018 at 13:29


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