Also known as: privity
Written by attorneys · grounded in primary & secondary sources — see below
A relationship between parties so intimate and direct that it nearly equates to contractual privity for imposing legal duties or liabilities.
Select any source to read its text and confirm it supports the definition.
Global Structures leased a storage yard to Harbor Builders under a written lease requiring Global to maintain structural supports. Global sold the property to Coastal Development without obtaining any release from Harbor. Harbor continued paying rent to Coastal but sued Global when maintenance failed. The ongoing contractual obligation placed Global in a relationship with Harbor that approached privity even after the transfer of the reversion.
Avalon Pharmaceuticals purchased a newly constructed warehouse from the original owner. The building developed structural defects traceable to the builder-vendor's work. Avalon sued the builder directly for breach of the implied warranty of habitability. The close connection between the builder and the property's intended use created a relationship approaching privity sufficient to support the claim in some jurisdictions.
Andre Antoine used a disputed strip of land for access to his farm for seven years. He then sold the farm to Amelia Amari, who continued the same use for another eight years. When the record owner sued to quiet title, Amelia sought to add the periods. The successive users' direct transfer of possession created a relationship approaching privity that permitted tacking under the prescriptive rules.
Apex Dynamics recorded an agreement granting an online retailer permanent space on a warehouse wall for parcel lockers. The retailer held no ownership or leasehold interest in the property. The recorded grant created a servitude enforceable by the retailer even though no traditional privity existed between the parties.
Harbor Builders assigned its month-to-month lease of a construction yard to Vertex Homes. The original lease required resurfacing a shared access road. Vertex took possession and began using the yard. The transfer placed Vertex in a relationship with the landlord approaching privity of estate, binding it to perform the covenant that touched and concerned the leased premises.
Aisha Ahmed purchased a vehicle from a dealer. Years later the steering mechanism failed due to a manufacturing defect, injuring a passenger who had no direct contract with the manufacturer. The manufacturer owed a duty of care to the foreseeable user because the relationship between manufacturer and end user approached privity for negligence purposes.
A relationship approaches privity when the parties share an intimacy of nexus so close that it nearly equates to a contractual bond, as when one party directly performs a service knowing it will benefit a specific third person.
Supporting sources
…warranty provisions and the disclaimer of liability contained in the purchase order do not bind them because (1) there was no privity of contract between them and the defendants, (2) the warranty provisions are not binding upon them because they were not read by or explained to Mr. Henningsen before he signed the purchase…