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Discuss the rule that a stranger to a contract cannot sue on the contract. Are there any exceptions to this rule?

Discuss the rule that a stranger to a contract cannot sue on the contract. Are there any exceptions to this rule?

Owlgen
Course: B.Com

1 Answer

A stranger to a contract refers to a person who is not a party to the contract. Even though a stranger may move a consideration, which is based on the doctrine of constructive consideration. Where the term any other person, that is a person other than the promisee, is technically referred to as stranger to consideration. However, such a person cannot bring a valid suit. For example, A, who is indebted to B, sells his property to C and C promises to pay off the debt to B. In case C fails to pay then B has no right to sue C being stranger to the contract. There are certain exceptions to the rule of stranger to a contract cannot sue, namely:

  • In the case of trusts, the beneficiary may enforce the contract.
  • Based on the same principle, the provision of marriage of female members of a Joint Hindu Family entitles the female member to sue for such expenses on a partition between male members.
  • Where there is any acknowledgement of liability or by past performance.
  • In case of family settlement, where the terms of the settlement are reduced into writing, the members of the family who originally had not been parties to the settlement may enforce the agreement.
  • Where the assignment of a contract is under picture, and the benefit under the contract has been assigned, the assignee may enforce the contract.

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April 14, 2019
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