TABLE OF CONTENTS

Sl. No. Particulars Page No.

1. Abstract

2. Introduction

3. Heading 1

4. Heading 2

5. Heading 3

6. Heading 4

7. Heading 5

8. Conclusion

9. References
Tittle : Comparative study on Privity of Contract in U.K
and India
ABSTRACT:
This comprehensive exploration delves into the intricate concept of privity of contract, conducting a
comparative analysis between English and Indian law to bring clarity to diverse legal landscapes.
Bridging the historical origins with contemporary interpretations, this study illuminates how
individuals in distinct regions perceive and navigate contractual relationships. The examination
extends beyond legal doctrines, aiming for everyday understanding. Real-life cases and legal
modifications serve as guiding markers, allowing an insightful journey into the variations in
addressing the rights and responsibilities within contracts. Drawing parallels between English and
Indian law, the study highlights nuanced differences, shedding light on how these legal systems
uniquely handle privity of contract. In a world where interconnectedness is paramount, this abstract
is crafted to be accessible and beneficial to a broad audience. It caters not only to legal professionals
but also to individuals curious about the divergent approaches to privity of contract in the legal
systems of the United Kingdom and India. Through this exploration, it offers valuable insights into
the diverse ways these jurisdictions navigate the complexities of contractual relationships.

Introduction:-

Definition of Contract:

The term “contract” is defined in section 2(h) of the Indian Contract Act,1872, as
follows: “An agreement enforceable by law is a Contract

DEFINITION OF CONSIDERATION UNDER SECTION 2(d):

When, at the desire of the promisor, the promisee or any other person has done or abstained from doing,
or does or abstains from doing, or promises to do or to abstain from doing, something, such act or
abstinence or promise is called a consideration for the promise;

ILLUSTRATION :

Assume Mr. X sells his car to Mr. Y for Rs. 2,00,000. Mr. Y accepts the offer and agrees to
pay him the amount. The sum of Rs. 2,00,000 will be a valid consideration, making this
agreement a contract.

The Section 25 of the Indian contact act opens with the declaration that “an agreement
made without consideration is void.” Consideration is what makes the foundation of a
contract.

Definition of consideration:-
-By Blackstone:

“Consideration is the recompense given by the party contracting to the other.”

-By Pollock :

“Consideration is the price for which the promise of the other is bought, and the promise
thus given enforceable.”

-By Justice Patterson:

“Consideration means something which is of some value in the eyes of the law… It may
be some benefit to the plaintiff or some detriment to the defendant.

History of Privity of contract :-

The concept of privity of contract has evolved over time. Historically, English common
law focused on direct relationships in contracts, meaning only those involved in the
contract could take legal action.

In the 19th and early 20th centuries, courts began recognizing exceptions to privity in
specific circumstances, allowing certain third parties to enforce contracts. However, it
wasn't until the mid-20th century that a broader shift occurred, expanding the scope of
privity exceptions.

IILUSTRATION:

A and B some benefit has been conferred upon X, X cannot file a suit to enforce the
contract because A and B are the only two parties to the contract whereas X is stranger
to the contract.

Nowadays, many legal systems recognize situations where even if you're not part of a
contract, you might still have rights or obligations under it. This shift makes contract
law more adaptable and fair.

ESTABLISHMENT AND DEVELOPMENTS IN THE RULE:

Though many cases were decided in the 17th century, the privity rule was still
not established. It took a few more centuries for the rule to take its form as we
know it. A study of a few cases decided in the 18th century and the 19th are
essential in order to reach that establishment.

In Marchington v. Vernon[xi], Buller J said that, independently of the rules

prevailing in mercantile transactions, 13 if one person makes a promise to
another for the benefit of a third, the third may maintain an action upon it.

In Drive Yourself Hire Co (London) Ltd v Strutt[xx], Denning LJ said: “It is often said
to be a fundamental principle of our law that only a person who is a party to a contract
can sue on it. I wish to assert, as distinctly as I can, that the common law in its original
setting knew no such principle. Indeed, it said quite the contrary. For the 200 years
before 1861 it was settled law that, if a promise in a simple contract was made expressly
for the benefit of a third person in such circumstances that it was intended to be
enforceable by him, then the common law would enforce the promise at his instance,
although he was not a party to the contract.”

HEADING-1:- The general principle in both Indian and English law is that only parties
involved in a contract can bring legal actions against each other. A significant English
case, Tweddle v. Atkinson, established that a plaintiff cannot sue if they are a stranger
to both the contract and its consideration. This concept of privity of contract underwent
further analysis in the case of Dunlop Pneumatic Tyre Co. Ltd v. Selfridge & Co. Ltd.
In the Indian context, the concept is similar, with a key distinction: in India, a person
who is a stranger to consideration can still initiate legal proceedings, whereas in
England, this is not permissible.

HEADING-2:- Doctrine of Privity of Contract in England

The doctrine of privity of contract asserts that only those participating in the
formation of an agreement have the right to enforce it. Traditionally, this principle
held firm, restricting legal actions for breach of contract to the involved parties.
However, in recent years, there has been a partial erosion of the privity rule. Third-
party beneficiaries, despite not being direct parties to the contract, have been granted
the ability to seek damages for breaches of contracts in certain cases.

The court established two principles:

1. The right to sue a contract is reserved for those directly involved; individuals not
party to the contract lack the right to enforce it personally (in personam).
2. For a valid contract, consideration must be provided by the promisee either to the
promisor or, upon the promisor's request, to another party.

HEADING-3:-Doctrine of Privity of Contract in India

The principle of privity of contract has been applicable in India, despite the Indian Contract Act having a broader definition of
consideration compared to English law. The common law principle of privity has generally been upheld in India, meaning that
only a party directly involved in a contract is entitled to enforce it.

HEADING-4:- Essentials of Privity of contract

1. Existence of a Contract:

-The foundational requirement is the presence of a contract involving two or more parties.

2. Competent Parties and Valid Consideration:

- Competency of the involved parties and the presence of valid consideration are prerequisites for invoking this doctrine.

3. Breach of Contract:

- A crucial element is the occurrence of a breach of contract by one of the parties.

4. Exclusive Right to Sue:

- Following a breach, the exclusive entitlement to initiate legal proceedings lies with the parties directly involved in the
contract, allowing them to sue each other for non-performance.

HEADING-5:- Differences between English Law and Indian law

ENGLISH LAW INDIAN LAW

Consideration must move from Consideration may move from
the promisee the promise or any other person
Stranger to consideration cannot Stranger to consideration can sue
sue
Consideration can be present or Consideration may be past,
future present or future
It only means something of some Natural love and affection is
value in the eyes of law moving considered to be a good
from the promisor. Love and consideration and may support
affection is not sufficient contract

HEADING-6:-
ENGLISH LAW CASE:
1. Tweedle VS. Atkinson, 1861 (121) ER 762: 124 RR 610:
The doctrine of privity of contract was first introduced in this case
only. The father and father-in-law of a bridegroom agreed between
themselves that each would pay a certain sum of money to the groom.
The groom sued the executors of his father-in-law for the payment of
the amount due. It was held that the groom was a stranger to the
contract and could not sue.
INDIAN LAW CASE:
In Jamuna Das Vs. Ram Avtar, (ILR 34 All 632):
The Privy Council extended the doctrine of privity of contract in India through this case.
A borrowed Rs. 40,000/- from B for mortgaging his land to B. Subsequently A sold that
land to C for Rs: 44,000/- and allowed C to retain the mortgage money of Rs. 40,000/-
in the sale price to redeem the mortgage from B. Here the agreement was entered only
between A and C. B was not a party to this agreement of A and C. B sued C for the
recovery of the mortgage money. The Privy Council dismissed the suit by applying the
doctrine of privity of contract. It held B was not a party to the agreement between A and
C.

REFERENCES:-
BOOKS:
1. BANGIA, R. (2009). Contract-1 (6th ed.). Allahabad law agency.
2. P jaganathan, & Jaganathan, U. (n.d.). conract-1 or general contracts.
3.
4.

WEBSITES:-
1. Soni, R. (2022) Doctrine of Privity under the Indian Contract law, 1872. https://blog.ipleaders.in/doctrine-of-
privity-of-contract/.

2. Agarwal, S. (2019) Doctrine of Privity of Contract & its Exceptions. https://lawtimesjournal.in/doctrine-privity-

of-contract/.

3. The Doctrine of Privity of Contract under Indian And English Law (no date).

https://www.legalserviceindia.com/legal/article-8557-the-doctrine-of-privity-of-contract-under-indian-and-

english-law.html.
4.

https://blog.ipleaders.in/doctrine-of-privity-of-contract/
https://lawtimesjournal.in/doctrine-privity-of-contract/

https://www.legalserviceindia.com/legal/article-8557-the-
doctrine-of-privity-of-contract-under-indian-and-english-
law.html
https://gyansanchay.csjmu.ac.in/wp-content/uploads/
2023/10/DOCTRINE-OF-PRIVITY.pdf

books – 1)contract and perfect relief. (12th edition)

author-Avtar Singh
2)