What is meant by PRIVITY OF CONTRACT?

Privity of contract refers to the direct relationship that exists between parties involved in a contract. This legal doctrine establishes that contracts create a bond between the parties who are directly involved, meaning that only those parties have the rights and obligations arising from the contract. Essentially, it emphasizes that third parties cannot enforce or be held liable under a contract to which they are not a party, reinforcing the concept that the benefits and responsibilities of the agreement apply solely to the signatories.

In the context of contract law, this principle is crucial because it defines the boundaries of contractual rights and obligations, ensuring that only those who are part of the agreement can enforce its terms or seek remedies in case of a breach. Knowing this helps clarify the limits of legal accountability within contract dealings.