Contract Law - Doctrine of privity
The doctrine of privity of contract is that, as a general rule1, at common law a contract can't confer rights2 or impose obligations3 on strangers to it, that is, persons who are not parties to it4. The parties to a contract are those persons who reach agreement5 and, whilst it could be clear in a simple case who those parties are, it may not be so obvious where there are several contracts, or several parties, or both, for example in the case of multilateral contracts6; collateral contracts7; irrevocable credits8; contracts made on the basis of the memorandum and articles of a company9; collective agreements10; contracts with unincorporated associations11; and mortgage surveys and valuations12.
Despite some earlier doubts13, in the mid-nineteenth century the doctrine of privity was accepted by the courts14, though those doubts seem to have been resurrected in more recent times15, albeit by a minority of cases16. The privity of contract rule used to be regarded as intimately connected with the doctrine of consideration17 and the rule that consideration must move from the promisee18.
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