What does privity mean?
Privity chiefly denotes a legally significant relationship, especially the relationship between parties who have entered into the same contract. Its importance lies in determining who may enforce a contractual right, receive a benefit, or be affected by an obligation: a person outside the privity of an agreement generally cannot claim a contractual benefit unless an exception applies, such as a statute or the terms of the contract itself. The word also has older meanings concerning close personal relationships, acquaintance, and confidential knowledge. Today, privity is most often encountered in legal and business contexts, where it helps distinguish connected parties from outsiders. Although it can sound formal or technical, it remains useful because it captures a specific relationship rather than merely describing a general connection between people.
nounPrivity is the relationship between parties who are parties to the same contract, especially where their legal rights and obligations are closely connected. In older and less common usage, it means a close personal relationship or shared confidential knowledge.
- The relationship between parties to a contract or other legal instrument, especially a relationship that gives rise to mutual rights or obligations.
- A close, personal relationship or friendship; now largely archaic or literary.
- Confidential knowledge shared between people; the state of being in one's confidence.
"The courts will not ordinarily enforce a contractual term to which a person outside the privity of the contract is not entitled."
"The settlement agreement was binding because all the signatories were in privity with one another."
"She had been admitted to the privity of the family and knew about the change in circumstances."
The plural is rare, though it may occur in legal or historical writing; privities is also sometimes used in the sense of close relationships or shared confidences.
"The case concerned several separate privities between the contracting parties."
In contract law, privity explains why a person cannot usually claim a contractual benefit unless the law or the contract gives them that right.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does privity come from?
The word comes through Anglo-French and Old French privite from Latin privitas, a noun formed from privus, meaning private or particular. In English, it developed from meanings of closeness, friendship, and shared knowledge before acquiring its important legal sense of the relationship between parties to a contract. Modern forms such as privacy, private, and privatize share the same Latin root.
How privity is actually used
The legal sense is the dominant modern use and is especially common in British and American legal writing. The older senses involving friendship, closeness, or confidential knowledge are formal, literary, or archaic.
Easily confused with privity
Privacy means freedom from intrusion into personal affairs, whereas privity means a legally close relationship, such as the connection between parties to a contract.
Privilege means a special right or advantage, while privity means a relationship or legally relevant connection between parties.