Question 5 OR (a)
Stranger to consideration and stranger to contract
9 marks
- Time to write
- About 18 minutes
From an older CBCS paper
Question
Question 5 OR (a) · 9 marks“A stranger to consideration can sue; a stranger to contract, however, cannot sue.” Explain the statement, giving the exceptions, if any.
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- ExplainTie the answer to the quoted statement: say what it means first, and come back to it at the end.
Write it in this order
- Read; underline the asks; jot your points 1 min
- 1 Rule: stranger to consideration and to contract; privity 4 marks 7 min
- 2 Exceptions 5 marks 9 min
- Check: every ask answered, key terms underlined 1 min
Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks.
Try it first. About 18 minutes for 9 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
The rule. Two different "strangers" must be kept apart. Indian law allows consideration to come from the promisee or from anyone else, so a party to a contract can sue on it even if the consideration was given by someone else (a stranger to the consideration). But a person who is not a party to the contract at all cannot sue on it (a stranger to the contract): this is the doctrine of privity of contract. Examples (ours): a grandfather gives his shop to his grandson by a deed to which his widowed sister is also a party, and in return the grandson promises her ₹5,000 a month. The consideration, the shop, came from the grandfather, not from the sister; but she is a party to the grandson's promise, so she can sue him on it. But if a caterer contracts with a college to serve lunch to its visiting examiners and then fails to turn up, an examiner, who is not a party to that contract, cannot sue the caterer on it.
Exceptions in which a stranger to a contract may enforce it (trust:; the others:):
- Rights that pass to him: an assignee to whom the benefit of a contract is transferred may enforce it, unless it depends on personal skill.
- Rights held for him: a beneficiary of a trust created by a contract between settlor and trustee can enforce his interest.
- Family settlements: a member of a family for whose benefit a family settlement is made in writing may enforce it.
- Marriage arrangements: a person for whose benefit a provision is made in a marriage contract or arrangement may sue on it, though not a party.
- Acknowledgement or estoppel: where the promisor, by his conduct, acknowledges himself as the third party's agent (for example by telling him he is holding money for him), a binding obligation to the third party arises.
- Land: a person who buys land knowing of a covenant attached to it is bound by that covenant, and the person entitled to its benefit may enforce it.
Conclusion. The statement is correct: a stranger to the consideration can sue, but a stranger to the contract generally cannot, except in these cases.
Where the 9 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Rule: stranger to consideration and to contract; privity | 4 |
| 2 | Exceptions | 5 |
| Total | 9 |
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