Also known as: privy · privies · privity · privity of · party to
Written by attorneys · grounded in primary & secondary sources — see below
A legal relationship in which one person or entity shares knowledge of confidential information or is bound by duties, liabilities, or other effects arising from a connection with another party.
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Pablo Perez sued a misnamed supplier for product defects. After the Rule 4(m) period, he moved to amend the complaint to name the correct corporate entity. The new defendant had received the original complaint and internal documents showing it was the intended target. Because the entity was privy to the facts of the transaction, the amendment related back and the claim proceeded.
Judge Parker Phillips owned shares in Platinum Partners through a family trust. When Platinum Partners appeared as a party in a contract dispute before him, the judge disclosed the holding. Because the judge was privy to the economic interest through the household member, he recused himself from the proceeding.
Patricia Patel permitted Pierce Patterson to represent that he owned her warehouse. Third-party Progressive Healthcare paid Patterson a deposit believing the representation. Because Patel was privy to the belief she had created and took no steps to correct it, she became liable to Progressive Healthcare for the changed position.
Philip Powell sold his leased commercial building to Pinnacle Holdings while remaining personally liable on the lease covenant to repair the roof. The original landlord refused to release Powell. Because Powell remained in privity of contract, he stayed obligated to perform the covenant even after the transfer.
Patriot Insurance sold a policy to Phoebe Park after its adjuster discovered a prior undisclosed loss but withheld the information. Park later suffered a covered loss and sued. Because the insurer was privy to material facts it intentionally concealed, it faced liability for the resulting pecuniary harm.
Parker Phillips bought a newly built home from its first owner. After discovering construction defects, he sued the original builder. Because Parker was not privy to the original sale contract, the court held he could not enforce the implied warranty of habitability directly against the builder.
No. A duty arises only when the relationship or circumstances impose an obligation, such as when a party intentionally conceals facts to induce reliance or when a fiduciary or insider relationship exists.
Privity of estate ends with the transfer of the leasehold interest, while privity of contract continues unless the landlord expressly releases the original tenant from the contractual promise.
Relation back occurs when the new defendant received timely notice of the action and knew or should have known that the suit would have been brought against it but for a mistake in identity.
…President; if he neglects or refuses to perform them he may be compelled by mandamus like other officers. The President is no party to this case. The Secretary is called upon to perform a duty over which the President has no control and for the neglect of which he is in no manner responsible. The Secretary alone is the…