What does "privity of contract" imply?

"Privity of contract" is a fundamental principle in contract law that asserts that only the parties directly involved in a contractual agreement have the right to enforce the terms of that contract. This means that external parties, who do not have a direct relationship with the parties to the contract, cannot seek to enforce its provisions or claim benefits under it.

This principle helps establish the boundaries of contractual relationships, ensuring that only those who have entered into an agreement and have mutual obligations can litigate issues arising from that contract. It reflects the idea that contracts are private agreements and emphasizes the importance of the expressed consent and intentions of the parties involved.

The incorrect options highlight misconceptions about the nature of contractual relationships. The idea that any third party can enforce a contract does not align with the principle of privity, as it is specifically designed to limit enforcement to the contracted parties. Furthermore, the notion that contracts must be public to be enforceable or that they must be in written format also misinterprets the established principles of contract law, where many contracts can be valid and enforceable without these conditions being met.