Privity of contract

Privity of contract is a legal concept relevant to the contracts particularly the contract of sale of goods or services. Privity of contract occurs only between the parties to the contract. If a third party gets a benefit under a contract, it does not have the right to go against the parties to the contract beyond its entitlement to a benefit. An example of this occurs when the a manufacturer sells a product to a distributor and the distributor sells the product to a retailer. The retailer then sells the product to a consumer. There is no privity of contract between the manufacturer and the consumer.

This, however, does not mean that the parties do not have another form of action e.g. Donoghue v. Stevenson -- here a friend of Ms. D bought her a bottle of ginger beer, which was defective. Since the contract was between her friend and the shop owner, there was no privity of contract, but it was established that the manufacturer has a duty of care owed to their consumers and she was awarded damages in tort.

See also

• Consumer protection law

External links

• Privity of contract from the collaborative English law glossary