Also known as:party in privity · parties in privity of contract · privity of contract · privity
Written by attorneys · grounded in primary & secondary sources — see below
A legal relationship between parties that arises from contract, property transfer, or succession and permits rights or obligations to be enforced between them or to run with the land. The relationship supplies the connection required for one party's duties or benefits to bind or benefit the other after a transfer or in successive use. It exists in distinct forms such as privity of contract and privity of estate.
Sources & Authorities
How it applies
Common Examples
6
Original Landlord Remains Liable After Sale
Landlord LLC leased theater space to IndieScreen Corp and expressly promised to maintain the marquee and exterior lighting. Two years later Landlord LLC sold the complex to Developer Inc. IndieScreen never released Landlord LLC from the promise. When Developer Inc discontinued the lighting, IndieScreen sued Landlord LLC for breach. The court held Landlord LLC remained bound because its obligation rested on privity of contract that survived the transfer of the reversion.
Subsequent Buyer Cannot Enforce Warranty
Builder-vendor Paragon Construction sold a newly built home to the first purchaser under an implied warranty of habitability. Five years later the first purchaser sold the home to Penelope Price. Penelope discovered serious structural defects and sued Paragon. The court dismissed the claim because Penelope lacked privity with Paragon and the jurisdiction limited the warranty to parties in direct contractual relationship with the builder.
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Cases
Restatements
Study Supplements
Tacking Adverse Possession Periods
Paula Pierce used a strip of neighboring land openly for seven years. She then conveyed her parcel to Priscilla Parks, who continued the same use for another eight years. When the true owner sued to eject Priscilla, the court allowed Priscilla to add Paula's seven years to her own because privity existed between the successive possessors through the deed.
Servitude Created Without Privity
Portia Price granted a right-of-way across her land to a utility company. The grant contained no reference to any prior estate relationship between Portia and the utility. When a later purchaser of the burdened land challenged the easement, the court upheld it because no privity relationship between the original parties was required to create the servitude.
Assignee Bound by Lease Covenant
Apex Biotech Campus leased lab space to NovaPharm Research Corp and promised to maintain specialized ventilation systems. Apex later assigned the lease to Helix Capital Fund LLC. NovaPharm never released Apex. When the systems failed after the assignment, NovaPharm sued Helix. The court held Helix obligated because the transfer placed it in privity of estate with NovaPharm and the covenant touched and concerned the leased premises.
Manufacturer Liable Without Privity
Pulse Media manufactured a lighting rig and sold it to a concert promoter. The rig later fell during a performance and injured audience member Priya Prasad, who had purchased only a ticket. Priya sued Pulse Media in negligence. The court rejected Pulse Media's defense that it lacked contractual privity with Priya because a manufacturer owes a duty of care to any foreseeable user regardless of direct contractual relationship.
Common questions
Frequently Asked
5
Does privity of contract survive a landlord's transfer of the leased property?+
Yes. When a landlord transfers its interest, an express lease promise that touches and concerns the land continues to bind the original landlord on privity of contract unless the tenant releases the obligation. The transfer affects only privity of estate.
Supporting sources
When may successive adverse users tack their periods of use?+
Successive adverse users may add their periods to satisfy the prescriptive period only when privity exists between them, such as through a deed conveying the interest.
Supporting sources
Is privity required to create a servitude?+
No. Modern authority provides that no privity relationship between the parties is necessary to create a servitude.
Supporting sources
Does absence of privity bar a products liability negligence claim against a manufacturer?+
No. A manufacturer owes a duty of due care to any foreseeable plaintiff, including users and bystanders, even without contractual privity with the injured party.
Supporting sources
When does a lease assignee become obligated on the tenant's covenants?+
A transferee of the leasehold becomes obligated on an express lease promise when the promise touches and concerns the land, the parties intended the burden to run, and the transfer places the transferee in privity of estate with the landlord.
…such situations.[^maj-18] In most areas product liability law has moved far beyond “mere” implied warranties running between two parties in privity with each other.[^maj-19] The rigid doctrines of real property law have tended to inhibit the application of implied warranties to transactions involving real estate.[^maj-20] Now,…