Also known as:lacking privity · no privity · absence of privity · privity defense
Written by attorneys — see sources below.
An absence of a direct contractual or estate relationship between parties that does not preclude creation of a servitude or recovery in tort for physical harm to foreseeable plaintiffs.
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How its tested
Common Examples
5
Recorded Access Agreement Creates Servitude
Tabitha and Nova Rural executed and recorded a written agreement granting Nova Rural permanent truck access across Tabitha's fields for a $10,000 payment. Tabitha later conveyed the farm to her daughter by warranty deed. The daughter erected barriers and refused access. Nova Rural sued for declaratory and injunctive relief. The court held that the recorded agreement created an enforceable servitude binding the daughter even though Nova Rural owned no adjacent land.
Intended Beneficiaries Sue Drafting Attorney
An attorney negligently drafted a will that failed to create the intended trusts for the testator's grandchildren. After the testator's death the grandchildren discovered the error and sued the attorney in tort. The attorney moved to dismiss on the ground that the grandchildren lacked privity. The court denied the motion and permitted the action to proceed.
Plaintiffs, who are some of the beneficiaries under the will of Eugene H. Emmick, deceased, brought this action for damages against defendant L. S. Hamm, an attorney at law who had been engaged by the testator to prepare the will. They have appealed from a judgment of dismissal entered after an order sustaining a general demurrer to the second amended complaint without leave to amend.
The allegations of the first and second causes of action are summarized as follows. Defendant agreed with the testator, for a consideration, to prepare a will and codicils thereto for him by which plaintiffs were to be designated as beneficiaries of a trust provided for by paragraph Eighth of the will and were to receive 15 per cent of the residue as specified in that paragraph. Defendant prepared testamentary instruments containing phraseology that was invalid by virtue of section 715.2 and former sections 715.1 and 716 of the Civil Code. Paragraph Eighth of these instruments transmitted the residual estate in trust and provided that the trust shall cease and terminate at 12 o’clock noon on a day five years after the date upon which the order distributing the trust property to the trustee is made by the Court having jurisdiction over the probation of this will. After the death of the testator the instruments were admitted to probate. Subsequently defendant advised plaintiffs in writing that the residual trust provision was invalid and that plaintiffs would be deprived of the entire amount unless they made a settlement with the blood relatives of the testator under which plaintiffs would receive a lesser amount. As a result, plaintiffs were compelled to enter into a settlement under which they received a share of the estate amounting to $75,000 less than the sum which they would have received pursuant to testamentary instruments drafted in accordance with the directions of the testator.
The third cause of action alleges that after admission of the will and codicils to probate, Harold Houghton Emmick, Walton Russell Emmick, Delta Inez Spelman, and Retha Newell instituted a will contest. The executors, defendant, and the contestants reached a settlement agreement under which $10,000 would be paid to the contestants from the assets of the estate in return for releases. Defendant caused to be executed releases which did not preclude the contestants from a subsequent attack upon the validity of the testamentary instruments. As a consequence, the contestants joined in a legal attack upon the validity of the residual clause and plaintiffs would have received an additional sum of $15,000 from the estate if the releases had been prepared in accord with good legal practice.
The trial court sustained a general demurrer to the second amended complaint without leave to amend and entered a judgment of dismissal from which the plaintiffs appealed.
A manufacturer sold brake calipers to a repair shop that installed them on a customer's car. The calipers failed and the car struck a pedestrian. The pedestrian sued the manufacturer in negligence. The manufacturer moved for summary judgment arguing absence of any contractual relationship with the pedestrian. The court denied the motion.
In May 1955, Claus H. Henningsen purchased a new 1955 Plymouth Plaza Club Sedan from Bloomfield Motors, Inc., an authorized De Soto and Plymouth dealer for Chrysler Corporation.
Mr. Henningsen intended the car as a Mother's Day gift for his wife, Helen Henningsen, and communicated that intention to the dealer. He alone signed a one-page printed purchase-order form. The reverse side contained, in fine six-point script type, a warranty clause limiting the manufacturer's obligation to replacement of defective parts within ninety days or four thousand miles and disclaiming all other warranties, express or implied. The front of the form contained two even smaller paragraphs directing attention to the back-side conditions. The form was a standardized document prepared by the manufacturer and used by all its dealers. No one called the fine-print provisions to Mr. Henningsen's attention, and he did not read them.
The car was delivered on May 9, 1955, after the dealer performed the items listed in Chrysler's New Car Preparation Service Guide. On May 19, 1955, while Mrs. Henningsen was driving north on Route 36 in Highlands, New Jersey, at twenty to twenty-two miles per hour on a smooth, paved highway, she heard a loud noise from the front of the car. The steering wheel spun in her hands and the vehicle veered sharply into a highway sign and brick wall. The car had been driven only 468 miles, had required no servicing, and had exhibited no unusual behavior before the accident.
An insurance appraiser with eleven years of experience examined the wrecked vehicle and concluded that something in the steering mechanism from the wheel down to the front wheels had broken or dropped off. Plaintiffs also presented expert testimony that the steering failure resulted from a latent manufacturing defect that could not have been discovered by reasonable inspection. The negligence counts against both defendants were dismissed at trial. The case was submitted to the jury solely on the implied-warranty claims.
The jury returned verdicts for both plaintiffs against Chrysler Corporation and Bloomfield Motors, Inc. Defendants appealed and plaintiffs cross-appealed from the dismissal of the negligence claim. The Supreme Court of New Jersey certified the matter directly before consideration by the Appellate Division.
A buyer purchased a sport utility vehicle from a dealer. The vehicle rolled over during normal use and injured the buyer. The buyer sued the manufacturer on both warranty and strict products liability theories. The manufacturer argued that lack of direct privity barred the claims. The court rejected the argument on the strict liability count.
Denny v. Ford Motor Co.87 N.Y.2d 248, 639 N.Y.S.2d 250, 662 N.E.2d 730, 736 (1995)
Nancy Denny was severely injured when the Ford Bronco II that she was driving rolled over on June 9, 1986. The rollover occurred after Denny slammed on her brakes to avoid a deer that had walked directly into the vehicle's path.
The Bronco II was a downsized small utility vehicle designed for off-road use on unpaved and rugged terrain. Ford marketed the vehicle as suitable for commuting, suburban and city driving, and family use in snow and ice.
Denny and her spouse sued Ford Motor Co. asserting claims for negligence, strict products liability and breach of implied warranty of merchantability under UCC 2-314(2)(c) and 2-318. The case went to trial in the District Court for the Northern District of New York in October of 1992.
Plaintiffs introduced evidence that the Bronco II had a high center of gravity, narrow track width and short wheel base that made it prone to rollover on paved roads. Ford introduced evidence that those design features were necessary to the vehicle's off-road capabilities and that it had not been designed primarily as a passenger car.
The jury found that the Bronco II was not defective under the strict products liability claim but that Ford had breached the implied warranty of merchantability and that the breach proximately caused Nancy Denny's injuries. Following apportionment the plaintiff was awarded judgment in the amount of $1.2 million.
Ford moved for a new trial under Federal Rule of Civil Procedure 59(a) arguing that the verdicts were irreconcilable. The trial court rejected the motion. On appeal the Second Circuit certified three questions of New York law to this Court.
A debtor promised a creditor to pay a sum of money to a third person in satisfaction of the debtor's obligation. The third person sued the debtor to enforce the promise. The debtor defended on the ground that the third person was not a party to the original agreement. The court permitted the third person to recover.
Lawrence v. Fox20 N.Y. 268 (1859)
Holly loaned a sum of money to Fox for a single day. At the moment of the advance Holly instructed Fox to repay that exact sum directly to Lawrence. Fox accepted the loan and expressly promised Holly that he would pay the amount to Lawrence. A third person who was present heard Holly give these directions concerning payment of the funds then being advanced.
Lawrence later commenced an action against Fox to recover the sum. At trial the defendant objected that the testimony of the person who overheard Holly's directions constituted inadmissible hearsay. The defendant further argued that any promise was void for lack of consideration and that no privity existed between Lawrence and Fox because the undertaking had been made solely to Holly.
The trial court overruled these objections and entered judgment for the plaintiff. On appeal the Supreme Court of New York affirmed that judgment.
Does lack of privity prevent creation of a servitude under the Restatement (Third) of Property?
No. The Restatement expressly states that no privity relationship between the parties is necessary to create a servitude. A recorded written instrument granting a permanent right that runs with the land is enforceable against successors even when the benefited party owns no touching land.
Supporting sources
Can a manufacturer be held liable in negligence to a plaintiff who never purchased the product?
Yes. Modern negligence doctrine rejects contractual privity as a limitation on a manufacturer's duty. The duty of reasonable care extends to all persons foreseeably endangered by a negligently made product, including users and bystanders who had no direct transaction with the manufacturer.
Supporting sources
Does absence of privity bar a strict products liability claim against a commercial seller?
No. Strict products liability applies to any commercial seller that places a defective and unreasonably dangerous product into the stream of commerce. Liability attaches even when the injured user or consumer had no contractual relationship with the seller and even when the seller exercised all possible care.
Supporting sources
Can intended beneficiaries of a negligently drafted will sue the drafting attorney in tort?
Yes. The lack of privity between the intended beneficiaries and the attorney does not preclude a tort action. The attorney owes a duty of care to the beneficiaries whose interests the will was meant to protect, and the beneficiaries may recover for losses caused by the attorney's negligence.
Supporting sources
20 N.Y. 268 (1859)
…in the defendant's hands, the judgment was arrested because no consideration from the plaintiff to the defendant was alleged and no privity shown. Similar observations appear in Lilly v. Hays (5 Ad. & Ellis, 548). The question was involved in confusion by earlier Massachusetts cases, and the Supreme Court of that State at one…
TortsNegligence · The duty question, including failure to act, unforeseeable plaintiffs, and obligations to control the conduct of third partiesUBEIntermediate