Exceptions to the doctrine of Privity of contract

A person who is a party to a contract is said to be privy to the contract and can benefit from it or have obligations imposed on him by it. He is also the only person who can sue or be sued under the contract

Required:

Discuss the exceptions to this doctrine.

  1. Third party insurance –Under the Insurance Act, users of motor vehicles should be compensated if the motor vehicle was being driven by an insured driver or an authorized driver.
  2. Agency – An agency contracts on behalf of the principal. The principal can be sued or sue once a contract has been entered by the agent.
  3. Trust –There is a relationship between parties that holds property on behalf of the other party called the beneficiary. The beneficiary can sue or be sued.
  4. Legal assignment – If a creditor assigns another person his debt then the assignee can sue the debtor as if he was the original creditor.



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