India`s contract law clearly states that there can be no foreigner for a contract. What does this mean exactly? And are there any exceptions? This is explained by the doctrine of the privity of a contract. Then. Q1. Vidya buys a property in Krishna. Rajiv already lives in the property with a three-year lease. As part of the purchase agreement, Vidya takes over the rental agreement. There are leaks in the house that Krishna promises to fix as part of the contract. A few months pass and the leaks are still not resolved. Rajiv calls Vidya, the new owner, and she says it`s Krishna`s responsibility.
Can Rajiv bring an action for damages against Krishna? In discussing the second rule regarding consideration, we have seen above that consideration can be made by the promisor or by a third party. If the audit is carried out by a third party, the promisor is qualified as a foreigner. Under Indian law, a foreigner who is considered can take legal action to enforce the promise, as you may have noticed in Chinayya v. Ramayya discussed above. There is a general rule of law that only the parties to a contract can pursue. In other words, if a person is not a party to a contract, they cannot sue. This rule is known as the “doctrine of contract confidentiality.” A contractual privilege is a relationship that exists between the parties who have entered into contractual obligations. There are two consequences of the doctrine of contract confidentiality that they pursue: If a contract requires a party to pay a certain amount to a third party and acknowledges it, then it becomes a binding obligation for the party to pay the third party. Recognition can also be implicit. A foreigner or a person who is not a party to a contract may take legal action for a contract in the following cases: If a person acquires land with notice that the owner of the land is bound by all the rights and responsibilities that affect the land, then he can sue for a contract between the previous landowner and a settler, even if it was not a contracting party. 5. Contracts concluded through an agent: The customer performs the contract concluded by his authorized representative, provided that the contractor acts within the limits of his powers and on behalf of the customer.
If a contract is concluded within the framework of a family agreement in order to benefit a foreigner (a person who is not a party), the alien may bring an action himself as the beneficiary of the contract. Rajiv, on the other hand, can sue Vidya for breaching its obligations under the lease. When a person enters into a contract through an agent in which the agent acts within the scope of his authority and on behalf of the person (principal). (2) A contract may not provide for any right (or) impose obligations arising therefrom on any person other than the parties. (or) A foreigner in a contract can sue. Peter promised Nancy`s father that he would marry Nancy, otherwise he would pay Rs 50,000 in damages. Eventually, he married someone else and broke the contract. Nancy filed a lawsuit against Peter, which was decided by the court because the contract was a family agreement with Nancy as the beneficiary.
After reaching the age when Ravi did not receive the money and questioned Arjun about it, he denied giving her his share. Ravi filed a lawsuit to recover. The court ruled that a trust had been formed with Ravi as the beneficiary for a certain amount and a share of the estate. Therefore, Ravi had the right to continue the contract between Arjun and his father, although he did not participate in it. If a contract is entered into between the trustee of a trust and another party, the beneficiary of the trust may sue by asserting his right under the trust, even if he is outside the contract. Here are the exceptions to the rule that a foreigner cannot sue in a contract: Ritika lived in an undivided Hindu family (HUF). The family had encountered concern for their marriage. Eventually, the family went through a division and Ritika filed a lawsuit to claim her wedding expenses.
The court decided the case because Ritika was the beneficiary of the disposition, even though he was a stranger to the contract. However, if Arjun doesn`t pay, John can`t sue because Arjun`s contract is foreign. It is important to note that the doctrine of deprivation contains exceptions that allow an alien to assert a claim as set out below. 1. A trust: In a trust, the beneficiaries of deeds may sue the trustee for the performance of his obligations, even if he is not a party to the proceedings. However, the name of the beneficiary must be clearly indicated in the contract. If a person is not a party to a contract, he or she is called a stranger to enter into a contract. This is a cardinal principle of law that only a contracting party can pursue. If a person is not a party to a contract, he cannot proceed, even if the contract is in his favor. To establish the legal relationship, the adequacy of the contract (contractual relationship) is required. A contract cannot confer rights or impose liability on a person who is not a party.
For example, A agrees with B to give Rs. 500 to C. C cannot sue A to recover Rs. 500 because there is no contract between A and C (the contract is between A and B) and C is a foreigner in the contract. The difference between a foreigner for consideration and a foreigner for the contract is therefore that a foreigner who is taken into account is a contracting party, but the consideration is provided by a third party. Although an unknown person is not a party to the contract at all, the contract exists between other parties. Peter owned land, which he sold to John, under the agreement that some of the land would be preserved as a public park. John joined the covenant and eventually sold the land to Arjun. Although Arjun was aware of the alliance, he built a house on the specific plot. When Peter learned of this, he filed a lawsuit against Arjun. Although Arjun declined any responsibility because he was not a party to the agreement, the court held him liable for the breach of the agreement. The Indian Contract Act of 1872 allows a third party to assume the “consideration” of an agreement.
However, a foreigner (third party) differs from a foreigner to a contract. The law does not allow a foreigner to take legal action on the contract. This right is only open to a person who is a party to the contract and is called the doctrine of contract performance. Since there is no contract between Rajiv and Krishna to repair the leak, if he takes legal action, it will likely be rejected by the court. Krishna had agreed in his purchase contract with Vidya to carry out the repairs. Therefore, she can take legal action against Krishna to do the job. If a contract is concluded in favour of a person, he can continue the contract even if he is not a party to the agreement. It is important to note that applicants for a life insurance policy do not have this right. 4. Assignment of contract: Assignment refers to the voluntary transfer of rights by one person to another.
In such a case, an assignee shall have the right to sue and enforce the rights conferred on him. (1) A person who is not a party to the contract may not bring proceedings even if the contract is in his favour and has provided consideration. (or) A foreigner in a contract cannot sue. 6. Agreements with the land: In the case of the transfer of real estate, the buyer of the land (or) the owner of the land is bound by certain conditions (or) agreements created by an agreement on the land. Arjun`s father had an illegitimate son, Ravi. Before he died, he put Arjun in possession of his estate on the condition that Arjun Ravi pay an amount of Rs 500,000 and transfer half of the estate to Ravi`s name once he turns 21. Let`s understand this with an example: Peter gives John 1,000 rupees to pay Arjun.
John confirms receipt of the funds to be paid to Arjun. However, he does not pay for it. Arjun can sue John to recover the amount. 3. Confirmation (or) forfeiture: The person who becomes the representative of a third party by confirmation (or) legal forfeiture may be sued by such a third party. Rita sold her house in Seema. A real estate agent, Pankaj, facilitated the transaction. On the sale price, Pankaj Rs 25,000 should be paid as his professional fees. Seema promised to pay the amount to Pankaj before taking possession of the property. She made three payments of 5,000 rupees each and then stopped paying it. Pankaj filed a lawsuit against Seema, which was decided by the court because Seema had acknowledged his responsibility for his conduct. 2.
Marriage agreements, division(or) other family arrangements: If an agreement is entered into in relation to marriage agreements, divisions(or) other family arrangements and a disposition is made in favour of a person, he or she may bring an action even if he or she is not a party to the agreement.