A, who is indebted to B, sells his property to C, and C the purchaser of the property, promises to pay off the debt to B. C fails to pay. Decide, whether B can sue C ?

CS Executive · Economic and Commercial Laws · PYQS · December 2021
A, who is indebted to B, sells his property to C, and C the purchaser of the property, promises to pay off the debt to B. C fails to pay. Decide, whether B can sue C ?

Answer & Explanation:

A Stranger to a contract cannot, as general rule, sue upon a contract both under English law and under Indian Law, there being no privity of contract between him and the Contracting party. A contract cannot Confer rights or impose obligations on any other persons other than the parties to it. A stranger to a consideration cannot sue under English Law but he can under the Indian Law, Thus according to Indian Contract Act, 1872, a stranger to a contract cannot sue but stranger to consideration can sue. Thus, a person who is not a party to a contract cannot sue upon it even though the contract is for his benefit. A, who is indebted to B, sells his property to C, and the purchaser of the property, promises to pay off the debt to B. C fails to pay. In case C fails to pay B. B has no right to sue C for there is no privity of contract between B and C because B is not a party to the contract.

Topics: Indian Contract Act, 1872

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