Also known as: privity rules · privity of contract
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A rule that determines whether a transferor of an interest in leased property remains obligated to perform an express lease promise after the transfer. The obligation survives if it rests on privity of contract and the enforcing party has not granted relief, or if it rests solely on privity of estate and the transfer does not end that privity.
A rule that determines whether a transferor of an interest in leased property remains obligated to perform an express lease promise after the transfer. The obligation survives if it rests on privity of contract and the enforcing party has not granted relief, or if it rests solely on privity of estate and the transfer does not end that privity.
Select any source to read its text and confirm it supports the definition.
A historical doctrine that barred a plaintiff from recovering against a manufacturer or seller for a defective product in the absence of a direct contractual relationship with the defendant.
Select any source to read its text and confirm it supports the definition.
A historical doctrine that barred a plaintiff from recovering against a manufacturer or seller for a defective product in the absence of a direct contractual relationship with the defendant.
Each sense below has its own examples, sources, and questions.
Patrick Phan leased commercial space to Pedro Pacheco under a lease containing an express promise to upgrade rooftop antennas. Pedro assigned the lease to Paige Porter in a writing that contained no release. When Paige stopped performing the upgrades, Patrick sued Pedro. The court held Pedro liable because the promise created privity of contract that survived the assignment.
Perry Pratt leased property to Penelope Price with an express maintenance covenant. Penelope assigned the lease to Platinum Partners and promised in writing to perform the covenant. Platinum later assigned to Peak Performance. When the maintenance failed, Perry sued Platinum. The court held Platinum liable on privity of contract that survived its own later assignment.
No. When the covenant rests on privity of contract, the original tenant remains liable after assignment unless the landlord expressly relieves the tenant of the obligation.
Supporting sources
Privity of contract arises from the original lease promise and survives assignment. Privity of estate arises from possession and ends with the transfer of the leasehold interest.
Supporting sources
Paula Pierce bought a carriage from a retailer. The carriage had a latent defect that caused an accident injuring her passenger. Paula sued the manufacturer. The court dismissed the claim because the passenger lacked any contractual relationship with the manufacturer.
Prism Analytics purchased a vehicle whose wheel collapsed, injuring a passenger who was not the buyer. The passenger sued the manufacturer. The court allowed the claim even though the passenger had no direct contract with the manufacturer.
Pacific Bank relied on an audit report prepared for a client. The report contained errors that caused the bank loss. The bank sued the auditor. The court denied recovery because the bank was not in privity with the auditor.
A worker was injured by a defective power tool purchased by his employer. The worker sued the manufacturer. The court permitted the suit without requiring the worker to show a direct purchase from the manufacturer.
MacPherson abolished the privity requirement for negligence claims involving defective products that are dangerous if defective, and the rule was later extended to all products-liability negligence actions.
Supporting sources
Most jurisdictions have abandoned or relaxed the strict privity rule, allowing intended beneficiaries such as will beneficiaries to sue negligent drafters, though a minority of states retain the rule.
Supporting sources
…If he can maintain the suit, it is because an anomaly has found its way into the law on this subject. In general, there must be privity of contract. The party who sues upon a promise must be the promisee, or he must have some legal interest in the undertaking. In this case, it is plain that Holly, who loaned the money to the defendant…