A STRANGER TO A CONTRACT CAN NOT SUE

                                                           PRIVITY OF CONTRACT

According to doctrine of privity of contract a stranger to a contract cannot sue even if such contract is for the benefit of his. For example A who is indebted to B, sells his property to C and c the purchaser of the property, promises to pay off the debt to B. in case C fails to pay B, B has no right to sue C for there is no privity of contract between B and C.

EXCEPTION TO THE DOCTRINE OF PRIVITY OF CONTRACT

1.       A beneficiary under an agreement to create a trust can sue upon the agreement.

2.       An assignee under an agreement made by the parties or by the operation of law can sue upon the contract for the enforcement of his right, title and interest.

3.       In case of family arrangement or settlements between male members of a Hindu family which provide for the maintenance or expenses for marriage of female members, although the latter is not party to contract can sue the arrangement.

4.       In case of acknowledgement of liability, e.g. where A receives money from B for paying C and admits to C the receipts of that amount, then A constitute himself as the agent of c.

5.       In cases where a person makes a promise to an individual for the benefit of third party and creates a charge on certain immovable property for the purpose the third party can enforce the promise though is a stranger to the contract.