S 6 A - privity of contract - S 6 A Privity of Contract and...

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S 6 A – Privity of Contract and Assignment The power of a contract to affect relationships is confined to the parties who agree to it. Third party – a person who is not one of the parties to a contract but is affected by it Privity of contract – the relationship that exists between parties to a contract General rule is that a contract does not confer any benefits or impose any obligations on a stranger to the contract Consideration must be given by party to the contract AND given by the party seeking to enforce the promise. Liability of Sellers – only purchaser and seller liable, relations of purchaser have no privity of conract Liability of Manufacturers – when goods sold with no intermediate inspection, manufacturers responsible for ensuring quality of goods, Donoghue vs. Stevenson Vicarious performance – third party performs on behalf of the promisor who remains responsible for proper performance, the third party does not assume liability. 1 If promisee agrees to performance of new third party then it is Novation and a new contract is formed with third party and original promisor is released 2 Only allowed when performance by promisor was the reason why promisee entered into the contract. 3
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This note was uploaded on 12/10/2011 for the course COMM 393 taught by Professor Elaine during the Spring '10 term at The University of British Columbia.

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S 6 A - privity of contract - S 6 A Privity of Contract and...

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