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Direction: In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choices
Principles:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.
II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.
Facts: A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.
Q. Can A's daughter sue B to get the contract enforced?
  • a)
    Yes. As contract was for her benefit she can sue B to get the contract enforced.
  • b)
    No. She is a stranger to the contract and she cannot sue B.
  • c)
    No. She is just an interested party. She does not have any locus standi to sue B.
  • d)
    Yes. Being the interested party she can sue B.
Correct answer is option 'A'. Can you explain this answer?
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Direction:In this section every question is appended with facts and pr...
The doctrine of privity of contract is that a contract cannot confer rights or impose those obligations arising under it, on any person except the parties to it. The term "parties" may seem simple enough but there are situations where it may become doubtful as to exactly who the parties are and resultantly, who, in the eyes of the law should be liable or should be compensated in event of inevitable breaches that may occur from time to time.
The concept of privity is part of the bedrock called common law which was made up of the collective judicial decisions derived from court decisions. Today however the law has recognized that with the increasingly complex world of commerce there must be some changes to accommodate certain exceptions to the general rule and guarantee restitution to the aggrieved. Growing consumer rights questions including warranty claims have contributed to this amendment of approach.
Exceptions to General Rule of Privity:
Collateral Contracts: A collateral contract is one that accompanies the main contract between two parties. It is one involving either of them and a third party. A classic example of this happened in England in 1953 in the case of Shanklin Pier v. Detel Products Ltd. In this case Shanklin Pier (plaintiff) employed contractors to paint a pier. The contractors then instructed Detel Products to supply them paint. This instruction was given based on a statement made by the defendants to the plaintiffs that the paint would last for seven years. When after just three months the paint work fell apart, the plaintiff sued and was given the go ahead by the courts to proceed with the suit against the defendant because even though the main contract had been between the contractor and the defendant there was in existence a collateral contract between the plaintiff and the defendant guaranteeing seven years protection.
Multilateral Contracts: When a person joins an unincorporated association such as a club, it could be said that he has gone into a contractual relationship with other members even if he may not be aware of their identity and if the person only liaises with the secretary of the organization. In one case the courts decided that a competitor in a race contracted not only with the organizers but with other competitors.
Agency: The status and vicarious liability issues of an agent also create exceptions to the rule of privity. When an agent negotiates a contract between his principal and a third party, it is generally regarded as being between the principal and the third party. However there are situations where it is subject to question as to whether or not an agent acted on his own behalf or not. It may even reach new heights of complexity when an agent makes use of a sub-agent, spawning twin questions of whether or not the contract will now be between the principal and the sub-agent or the agent and the sub-agent.
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Direction: In this section every question is appended with facts and principles, and multiple choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts: A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Can A's daughter sue B to get the contract enforced?

Direction:In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts:A and B are partners of this firm. A and B entered into a contract that when As daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Q. Is As daughter a party to the contract?A. No. As daughter is not a party to the contract. The contract was formulated for As daughters benefit.B. No. The contract is between A and B. As daughter is a stranger to the contract.C. Yes. As daughters interest was involved. So she was a party to the contract.D. Yes. As the fixed deposit was in her name, As daughter was a party to the contract

Direction: In this section every question is appended with facts and principles, and multiple choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts: A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Is A's daughter a party to the contract?A. No. A's daughter is not a party to the contract.The contract was formulated for A's daughter's benefit.B. No. The contract is between A and B. A's daughter is a stranger to the contract.C. Yes. A's daughter's interest was involved. So she was a party to the contract.D. Yes. As the fixed deposit was in her name, A's daughter was a party to the contract.

Read the following passage and answer the question.Rule of natural justice are placed so highthat it has been declared time and again by courts that “no human law are of any validity, if contrary to this”, and court of law could discard an act of parliament if it is contrary to natural justice. Generally no provision is found in any statute for observance of principle of natural justice by adjudicating authorities.Question then arises, whether the adjudicating authorities are bound to follow these principles. Law is well settled on this point, courts have observed that even though there is no positive words in a statuteor rules requiring that the parties shall be heard, yet the principles of natural justice will supply the omission of legislature. In other words if a statute or rule authorising interference with property, civil or fundamental rights was silent on question of hearing and notice, the courts will apply the rules as it is “of universal application and founded on plainest principle of natural justice”. Non-observance of principle will invalidate the exercise of power by any authority. Principle of natural justice are binding on all courts, judicial bodies and quasi judicial bodies. Question is -are they applicable to an administrative action? Earlier court took the view that it is inapplicable but as per lord denning “that heresy has been scotched”. Thus a statutory body irrespective of its nature or function has to act fairly and not in an arbitrary manner.Principles of natural justice differs from situation to situation but certain basic premises remain the same. For instance, accused should know the nature of accusation made, he should be given an opportunity to state his case and tribunal should act in good faith. Whenever, a complaint is made to court regarding non observance of principles of natural justice, court has to see whether the observance of that rule was necessary for a just and fair decision as per the facts of the case. If it was necessary then court will declare the decision ultra vires the power of authority.Traditionally, there are 2 principles of natural justice.(i) No man shall be judge in his own cause, or no man can act as both at the one and the same time- a party or a suitor and also a judge, or a deciding authority must be impartial and without bias.(ii) Hear the other side, or both the side must be heard, or no man should be condemned unheard, or that there must be fairness on the part of deciding authority.Rule against bias simply means that, justice should not only be done, but manifestly and undoubtedly be seen to be done. Anything which tends or may be regarded as tending to cause such person to decide a case otherwise than on evidence must be held to be biased. Judge is supposed to be indifferent to the parties in a controversy. He must be in position to decide the matter objectively. He cannot allow his personal prejudice to go into decision making. Object is not merely that scales be held even; it is also that they may not appear to be inclined. This rule also applies to administrative authorities required to act judicially.Right to be heard simply means that, a party is not to suffer in person or in purse without an opportunity of being heard. In short, before an order is passed against any person, reasonable opportunity of being heard must be given to him. This maxim includes 2 elements- notice and hearing. Any action taken without notice is against principle of natural justice and is void ab initio. Notice must be clear, specific and unambiguous and charges should not be vague and uncertain. Moreover, notice must give reasonable opportunity to comply with requirement mentioned therein. Hearing simply means that no adverse action can be taken against any person without giving him an opportunity of being heard. It also means that, adjudicating authority must disclose all evidence and material placed before it in the course of hearing proceeding and must afford an opportunity to the person against whom the evidences are to be used to rebut it. Another rule of hearing is “he who hears should decide” or “one who decides must hear”.Q.Raman was removed from service of XYZ ltd which is a government company. Before removal he was given proper show cause notice and was heard by Principle secretary of Power ministry who was also a share holder in XYZ limited but did not have any controlling interest in the company. He owned 20% of share in the company. Raman before being removed was heard properly and all principles of natural justice related to notice and hearing were followed. Decide, whether his removal was valid or not.

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Direction:In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts:A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Q. Can A's daughter sue B to get the contract enforced?a)Yes. As contract was for her benefit she can sue B to get the contract enforced.b)No. She is a stranger to the contract and she cannot sue B.c)No. She is just an interested party. She does not have any locus standi to sue B.d)Yes. Being the interested party she can sue B.Correct answer is option 'A'. Can you explain this answer?
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Solutions for Direction:In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts:A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Q. Can A's daughter sue B to get the contract enforced?a)Yes. As contract was for her benefit she can sue B to get the contract enforced.b)No. She is a stranger to the contract and she cannot sue B.c)No. She is just an interested party. She does not have any locus standi to sue B.d)Yes. Being the interested party she can sue B.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CLAT. Download more important topics, notes, lectures and mock test series for CLAT Exam by signing up for free.
Here you can find the meaning of Direction:In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts:A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Q. Can A's daughter sue B to get the contract enforced?a)Yes. As contract was for her benefit she can sue B to get the contract enforced.b)No. She is a stranger to the contract and she cannot sue B.c)No. She is just an interested party. She does not have any locus standi to sue B.d)Yes. Being the interested party she can sue B.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Direction:In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts:A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Q. Can A's daughter sue B to get the contract enforced?a)Yes. As contract was for her benefit she can sue B to get the contract enforced.b)No. She is a stranger to the contract and she cannot sue B.c)No. She is just an interested party. She does not have any locus standi to sue B.d)Yes. Being the interested party she can sue B.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Direction:In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts:A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Q. Can A's daughter sue B to get the contract enforced?a)Yes. As contract was for her benefit she can sue B to get the contract enforced.b)No. She is a stranger to the contract and she cannot sue B.c)No. She is just an interested party. She does not have any locus standi to sue B.d)Yes. Being the interested party she can sue B.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Direction:In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts:A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Q. Can A's daughter sue B to get the contract enforced?a)Yes. As contract was for her benefit she can sue B to get the contract enforced.b)No. She is a stranger to the contract and she cannot sue B.c)No. She is just an interested party. She does not have any locus standi to sue B.d)Yes. Being the interested party she can sue B.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Direction:In this section every question is appended with facts and principles, and multiple-choice answers. You are required to read the facts carefully, then read the principles, apply the principles to the given facts and make a select one the option which is the most appropriate answer from the given choicesPrinciples:I. A third party or a stranger to the contract cannot enforce the terms and conditions of the contract.II. A party, for whose benefit the contract has been entered into, can sue the parties and get the contract enforced even if it is a stranger to the contract.Facts:A and B are partners of this firm. A and B entered into a contract that when A's daughter joins the firm, both A and B will create a fixed deposit in her name and contribute 5% of their monthly income to that account for six months. B fails to keep his end of the promise.Q. Can A's daughter sue B to get the contract enforced?a)Yes. As contract was for her benefit she can sue B to get the contract enforced.b)No. She is a stranger to the contract and she cannot sue B.c)No. She is just an interested party. She does not have any locus standi to sue B.d)Yes. Being the interested party she can sue B.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CLAT tests.
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