Question

What practical reasons do you think underlie the exception to the rule of privity of contract that allows assignees and delegatees to sue and be sued in the event of a breach of the related contract?

Answer 1

The doctrine of the rule of the privity, allows parties to the contract to sue each other in the event of the breach of contract. But, it does not allow the third parties to do so. Though there are some exceptions that allows assignees and delegatees to sue and get sued as well. There can be different practical reasons for this as follows:

1. Assignees are the parties that are given the rights of the benefits via assignment of rights. Hence, it the benefits to them get affected, then they can sue. If the rights given to them is also not legal, then they can be sued as well.

2. People as assignee avail the benefits, then there are entitled to face the liabilities as well if contract is not executed properly.

3. Delegatees also own the responsibilities and authority related to the contract. So, in the event of non-execution of the contract, they are also responsible. If they have done their role, but could not get compensated, then they can sue. If they have not done their role and due to this reason, contract is not executed, then they will be sued.

So, it is the important roles played by the assignees and delegatees in the execution and implementation of the contract as well as the benefits attached to them, that create such exceptions.