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Privity of Contract is subject to the exception:
- a)Where a trust or charge is created
- b)where payment is made to a third party
- c)Where payment is made by a third party
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Privity of Contract is subject to the exception:a)Where a trust or cha...
Privity is a relationship between parties to a contract or promise. Privity of contract is required in most cases in order to file a lawsuit that is based on a contract. A failure to have privity will usually result in the inability to sue; however, there are some exceptions to this rule.
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Privity of Contract is subject to the exception:a)Where a trust or cha...
Doctrine of privity means that only a party to contract can sue...a stranger to a contract can not sue ....but there r certain exceptions ....trust is one of that exceptions....
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Privity of Contract is subject to the exception:a)Where a trust or cha...
Privity of Contract and Exceptions
Privity of contract refers to the principle that only the parties to a contract have rights and obligations under that contract. This means that only the parties who have entered into a contract can sue or be sued for any breaches of the contract. However, there are certain exceptions to this principle, one of which is where a trust or charge is created.
Exception: Where a trust or charge is created
When a trust or charge is created, it can create rights and obligations that extend beyond the original parties to the contract. A trust is a legal relationship where one party (the trustee) holds property or assets for the benefit of another party (the beneficiary). A charge, on the other hand, is a security interest granted over assets to secure a debt or obligation.
In the case of a trust, the trustee becomes a party to the contract and can enforce the contract on behalf of the beneficiary. This means that the beneficiary, who is not a party to the original contract, can still enforce the terms of the contract against the other party. Similarly, in the case of a charge, the chargee (the party holding the security interest) can enforce the contract on behalf of the chargor (the party granting the security interest).
This exception recognizes the fact that trusts and charges can create separate rights and obligations that go beyond the scope of the original contract. It allows for the enforcement of these additional rights and obligations by parties who are not directly involved in the contract but have an interest in the contract through the trust or charge.
Conclusion
In conclusion, the exception to the privity of contract principle where a trust or charge is created allows for parties who are not direct parties to the contract to enforce the terms of the contract. This exception recognizes the separate rights and obligations that can arise from a trust or charge and ensures that these rights and obligations are protected and enforceable.
Privity of contract refers to the principle that only the parties to a contract have rights and obligations under that contract. This means that only the parties who have entered into a contract can sue or be sued for any breaches of the contract. However, there are certain exceptions to this principle, one of which is where a trust or charge is created.
Exception: Where a trust or charge is created
When a trust or charge is created, it can create rights and obligations that extend beyond the original parties to the contract. A trust is a legal relationship where one party (the trustee) holds property or assets for the benefit of another party (the beneficiary). A charge, on the other hand, is a security interest granted over assets to secure a debt or obligation.
In the case of a trust, the trustee becomes a party to the contract and can enforce the contract on behalf of the beneficiary. This means that the beneficiary, who is not a party to the original contract, can still enforce the terms of the contract against the other party. Similarly, in the case of a charge, the chargee (the party holding the security interest) can enforce the contract on behalf of the chargor (the party granting the security interest).
This exception recognizes the fact that trusts and charges can create separate rights and obligations that go beyond the scope of the original contract. It allows for the enforcement of these additional rights and obligations by parties who are not directly involved in the contract but have an interest in the contract through the trust or charge.
Conclusion
In conclusion, the exception to the privity of contract principle where a trust or charge is created allows for parties who are not direct parties to the contract to enforce the terms of the contract. This exception recognizes the separate rights and obligations that can arise from a trust or charge and ensures that these rights and obligations are protected and enforceable.
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Privity of Contract is subject to the exception:a)Where a trust or charge is createdb)where payment is made to a third partyc)Where payment is made by a third partyd)None of theseCorrect answer is option 'A'. Can you explain this answer?
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