Exceptions of Privity of Contract
By: Robin Pandey Date: 27/02/2022
1. Beneficiaries under trust or charge: Where a trust is created by a contract, a
beneficiary may enforce the rights which the trust so created has given him though not a party to
the contract. Similarly, a beneficiary can enforce a charge though not a party to the deed. In Khwaja
Muhammad Khan v. Hussani Begam (1910), an agreement was executed between a boy's father
and a girl's father that the former would pay to the girl a certain sum of money as Kharch-i-pandan
in perpetuity in consideration of the girl's marriage with the boy. The girl and the boy were both
minors at that time. Certain properties were also charged for the payment of the money. After 19
years owing to differences the lady left her husband's home and filed a suit against her father-in-law
for the recovery of arrears of the annuity. It was held that the lady was entitled to proceed in equity
to enforce her claim. In Rana Uma Nath Baksh Singh v. Jang Bahadur, the appellant was appointed
by his father as his successor. He was given the possession of the entire estate. In consideration
thereof the appellant agreed with his father to pay a certain sum of money and to give a village to
the illegitimate son of his father, on his attaining majority. It was held that the illegitimate son was
entitled to claim the specified amount and the village as a trust was created in his favour. In Post
Master General v. Ram Kirpal Sahu, it was held that an addressee of insured article can claim
compensation from the Central Government on non-delivery of insured articles as a constructive
trust is created in his favour.
2 Marriage settlement, partition or other family arrangements: In case of family
arrangements if a provision is made for the benefit of a person, he may enforce the agreements
although he is not a party to it. Section 15 of the Specific Relief Act, 1963 provides that where the
contract is a settlement on marriage, or a compensation of doubtful rights between members of the
same family, any person beneficially entitled there under may obtain specific performance. In Rose
Fernandez v. Joseph Gonsalves, a girl's father agreed to marry her with the defendant. It was held
that the girl after attaining majority was entitled to sue the defendant for damages for the breach of
promise of marriage. In Shuppu Ammal v. Subramaniyam , on partition of a Hindu Undivided Family
two brothers agreed to invest Rs. 300 each for the maintenance of their mother. The mother was
held entitled to sue to enforce the agreement though she was not a party to the contract.
In Sundaraja Aiyangar v. Lakshmi Ammal, a provision was made for the marriage expenses of a
female member of a Hindu Undivided Family at the time of partition of the HUF. The agreement was
made between male members of the HUF. It was held that the female member was entitled to sue
to enforce the agreement. In Daropati V. Jaspat Rai, the defendant's wife deserted him due to his
cruelty. He then Promised her father to treat her properly and in case of his failure to treat Properly
he would pay her monthly maintenance and to provide her a dwellings We was again ill treated and
driven out. It was held that the wire was citied to enforce the promise made by the defendant to her
father
3. Acknowledgement or estoppel: If a person is required under the terms of a contract, to
pay a certain sum of money to a third person and he acknowledges it to that person, he becomes
bound to pay the money to the third person. In Devaraja Urs. v. Ram Krishnaiah, a person sold a
house. He left the sale price in the hands of the buyer for payment to a creditor. The buyer made
part payment to the creditor, promising to pay the balance soon. It was held that the creditor was
entitled to sue the buyer for recovering the balance.
4. Agency: If A has made contract with B, C may intervene and take A's place if he can show that
A was acting throughout as his agent even though B entered into the contract in ignorance of this
fact. Thus undisclosed principal has the right to sue a third party. But this right, as provided in
section 232 is subject to the rights and obligations subsisting between the agent and the third party.
Comments
Post a Comment