How Privity Of Contract Affects Your Agreements

Privity of contract is the relationship between the parties who are directly involved in a legal agreement. This doctrine states that only the parties to an agreement (typically the offeror and the offeree) have the right to sue or be sued under that contract. It implies that a third party or non-signatory has no legal rights if they try to enforce the terms of the contract or pursue legal remedies. This rule ensures that contractual obligations are clear and confined to the parties who have explicitly agreed to them. For example, if a supplier and a retailer enter into a contract to deliver goods, only the supplier and the retailer can take action regarding the terms of that contract. A third party, such as a consumer, cannot directly intervene, even if they are affected by the contract.