Question

If a contract is made between two people, and a third person benefits from it, what legal rule stops that third person from suing if the contract is broken, unless special rules apply?

Accepted Answer

The legal rule that stops a third person from suing if a contract made between two other people is broken, even if that third person benefits from it, is called the doctrine of privity of contract. This doctrine establishes that a contract creates rights and obligations only between the parties who made it. These parties are the individuals or entities who directly negotiate, agree to, and sign the terms of the agreement.

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If a contract is made between two people, and a third person benefits from it, what legal rule stops that third person from suing if the contract is broken, unless special rules apply?

The legal rule that stops a third person from suing if a contract made between two other people is broken, even if that third p....