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Wilfrid Laurier University
Daniel J Fife

1READING NOTESCHAPTER 12 Privity of Contract and AssignmentContracts create rights and duties between parties entering into the agreement these rights may carry values transferable to an outside party Or a party may want to arrange for their duties to be performed by another personPrivity of ContractWho may I sueLimits on the Scope of Contractual Rights and DutiesoGeneral rule is that a contract does not confer any benefits or impose any obligations on a stranger to the contractoTo succeed in an action in contract the plaintiff must prove privity of contract with the defendantmust show they are both parties to same contractBOwed Debt Aby AA owes B offers work to C offers to C in exchange Cpay debt for paying for AdebtsoB cannot enforce Cs promise because there is no privity of contract between them promise exists between A and CIf C doesnt pay then B can only sue A who consequently sues C for failure to carry out promiseoArgument against permitting a third person to sue on contract is that she has not given consideration for the promiseoPrivity of contract can have harsh consequences when it prevents a third person from enforcing a contract especially when the whole object of the contract was to benefit the third partyLiability of Sellers of GoodsoIf a mother buys a can of poisonous salmon that harms her and her familyonly she can successfully sue the merchant for breach of implied term contract rest of the family has no privity of contract and cannot recover damagesoRest of the family as well as the mother could use tort law in a case of negligence against the manufacturer but not the merchant
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