Privity of contract is a legal doctrine in contract law that stipulates that only the parties involved in the contract—those who have entered into the agreement—have the rights and obligations under the contract. This means that only these parties can sue or be sued to enforce the terms of the contract or claim damages for any breach.
In the context of real estate, privity of contract is significant because it limits the ability to enforce the terms of a real estate agreement to those who are direct parties to the contract. For example, if a landlord enters into a lease agreement with a tenant, only the landlord and the tenant (or their legal successors) have the right to enforce the lease terms or seek remedies if the terms are breached.
This doctrine generally excludes third parties—those who are not a party to the original contract—from having any rights or obligations under the contract, even if they might benefit from it. However, there are some exceptions, such as contracts made for the benefit of a third party (known as third-party beneficiary contracts), where the third party may have the right to enforce the contract.
