Also known as: privies · privy · privity of contract · privy council
Written by attorneys · grounded in primary & secondary sources — see below
A relationship between parties each having a legally recognized interest in the same subject matter such as a contract or property interest.
Select any source to read its text and confirm it supports the definition.
Harbor Properties leased ground-floor space to MetroBank and expressly promised to maintain vault facilities and backup power. Five years later Harbor sold the building to Apex Capital. MetroBank never released Harbor and sued Harbor when the systems failed. Because Harbor's obligation rested on privity of contract, the sale did not terminate that privity and Harbor remained liable.
Patricia Patel bought a newly built home from its first owner. After discovering construction defects she sued the original builder-vendor. Because Patel had no contractual relationship with the builder the court held she could not enforce the implied warranty of habitability against it.
Perry Pratt occupied a strip of land adversely for seven years then conveyed his interest to Penelope Price who continued the same use for another eight years. Because Pratt and Price were in privity the periods combined to satisfy the statutory period and Price acquired title.
Peak Performance recorded an agreement granting an online retailer permanent space on an exterior wall for parcel lockers even though the retailer held no ownership or lease interest in any parcel. Because no privity relationship is required the recorded grant created an enforceable servitude.
Global Structures leased a storage yard to Harbor Builders under a lease requiring periodic resurfacing of a shared access road. Harbor assigned the lease to Vertex Homes which took possession. Because the assignment brought Vertex into privity of estate with the landlord Vertex became obligated to perform the resurfacing covenant.
Pedro Pacheco bought a car whose brakes the manufacturer had negligently assembled. The defect caused an accident injuring a pedestrian. Because the manufacturer owes a duty of care to any foreseeable plaintiff the absence of contractual privity did not bar the pedestrian's negligence claim.
A landlord remains liable on an express lease covenant after transfer if the obligation rests on privity of contract and the tenant has not released the landlord. Privity of estate ends with the transfer but contractual privity survives absent a release.
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Courts are split. Some require privity of contract between the subsequent purchaser and the builder and therefore deny the claim. Others relax the privity requirement for new-home warranties.
…of Sir Walter Raleigh for treason. Lord Cobham, Raleigh's alleged accomplice, had implicated him in an examination before the Privy Council and in a letter. At Raleigh's trial, these were read to the jury. Raleigh argued that Cobham had lied to save himself: "Cobham is absolutely in the King's mercy; to excuse me cannot avail…
…U. S. 343; Baker v. Baker, Eccles & Co., 242 U. S. 394. But we have no such situation here. The trustee of the trust was in privity with the deceased. She was the settlor; and under the trust, the trustee was to do her bidding. That is to say, the trustee, though managing the res during the life of the settlor, was on…
…will be sufficient to rebut the presumption of reliance. For example, if petitioners could show that the "market makers" were privy to the truth about the merger discussions here with Combustion, and thus that the market price would not have been affected by their misrepresentation, the causal connection could be…
…warranty provisions and the disclaimer of liability contained in the purchase order do not bind them because (1) there was no privity of contract
…in question? (2) Was there a final judgment on the merits? (3) Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication? The Bernhard decision has been widely followed. Many courts have abandoned the mutuality requirement and now permit the use of collateral estoppel…
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Successive adverse users may add their periods to satisfy the statutory requirement only when privity exists between them. Privity is satisfied by a conveyance or other transfer of the possessory interest.
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No privity relationship between the parties is necessary to create a servitude. A recorded grant may create an enforceable servitude even when the beneficiary holds no ownership or lease interest in the burdened land.
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An assignee is bound when the covenant touches and concerns the leased property, the original parties intended the burden to run, and the assignment brings the assignee into privity of estate with the landlord.
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No. A manufacturer owes a duty of due care to any foreseeable plaintiff. Absence of contractual privity is not a defense when the product causes personal injury to a user, consumer, or bystander.
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