Prepared By Karim Mussa

INTRODUCTION.
In contract making, A contract is always formed by two parties and once such a contract as been formed,

Automatically the existing Contract will create the relationship between the parties so contracted usually,

such relation creates Rights and duties from this each part must enjoy the rights from another, and at same

time there must be some obligation to be performed.

In Contract, when a party does not enjoy the rights from the liability of another part, the circumstances

require that such the part to a contract can sue.

Therefore the requirement is only a person who is a party to a contract may have a rights to sue another

for failure to performance intended obligation.

MAIN BODY

What is privity?

Means the relation which exists and empowers the contracting parties to sue one another. It is a

rule under the Law of Contract, that contracting parties have the rights to sue one another

provided that the relation existing between the two in other words, if a person is not part to the

contract, in law he cannot sue. In other language, a person who cannot sue another person

because he is not part to a contract is called A stranger to a contract and the rule is a stranger to a

contract cannot sue. According to Beswick v. Beswick1 the ratio from the case is; the third party

cannot sue for breach of contract when they were not a party to the contract, even if they were

named as a beneficiary of the contract. And executors of wills can sue specific performance of

promises made in contract with the deceased.

1
[1968] AC 58, [1967] ER 1197
The doctrine of privity is not covered under Law of Contract Ac2t, in other words, the Law of

Contract Act, is silent on the righty of third person to sue in a relation which he is not part to it

therefore the doctrine of privity to a contract is a common Law rule which is acceptable in

matter relating to Contract however, although the Law of Contract Act is silent, in terms of

section 2(d) of Law of Contract Act3 gives the right to a person to pay consideration even if he is

not a part to a contract.

EXEPTIONS TO PRIVITY RULE

In Law of Contract Act, as previous observed a person who is not a part to a contract cannot sue

however its important to bear in mind that, the application of this document is not absolute in this

is true that, in other circumstances acceptable under the law even a stranger who is not part to the

contract is allowed to sue in the court.

The person who is not a party to a contract can sue in the following circumstance as indicated

hereunder;

In matters relating to Negotiable instrument. A holder may sue any person

whose signature appears on the bill not necessarily the immediate party

under The Bill Of Exchange Act in section 38(a)4. Thus its clear that such

provision provides an exception to general rule of privity of contract

In matters relating to agency. Thus grouped into Principal, Agent and

beneficialy or third party as explained here under

2
[CAP 345,R.E 2018].
3
Ibid section 2 (d).
4
[CAP 215 R.E 2002].
 Principal

Agent Beneficiary

In matters relating to Contract of trustee

In matters relating to Contract based on Insuarance. Therefore third party

may sue the parties to the contract of insurance that is either the owner of

the motor vehicle or the company of insurance or both.

Transfer of Landed Property. A person who buys property with notice that

the seller or owner of the land is bound by certain obligations created by a

covenant affecting the land shall be bound by them even.

though he was not a party to the covenant

CONCLUSION

CRITICIMS OF THE DOCTRINE OF PRIVITY OF CONTRACT

The doctrine of privity of contract it infringes the rights of the beneficiaries. Thus it limit

liabilities and rights to the parties only hence the third parts rights is infringed since he or

she was not a party to a contract but was made for his or her interest. Secondly pivity of

contract defeat the intention of the parties to the contract.

 REFFERENCE

1. STATUTES

The Law of Contract Act CAPS 345 R.E 2018

The bill of exchange Act Cap 215 R.E 2002

2. CASE LAW

Beswick v. Beswick [1968] AC 58, [1967] ER 1197