Legal Definitions - nonprivity

Nonprivity refers to the legal situation where two parties do not have a direct contractual relationship with each other. In legal terms, it means there is a lack of "privity of contract," which is the direct link between parties who have entered into an agreement.

Historically, the concept of privity of contract often limited who could sue whom. If you weren't directly part of the contract, you generally couldn't sue for a breach of that contract or for issues related to goods or services exchanged under it. However, modern law, especially in areas like product liability, has significantly broadened who can sue, often allowing claims even when nonprivity exists.

• Example 1 (General Nonprivity): A homeowner hires a general contractor to build an addition to their house. The general contractor then hires a separate plumbing company to install all the new pipes and fixtures. If the homeowner later discovers a significant defect in the plumbing work and wants to sue the plumbing company directly, they are in nonprivity with the plumbing company. Their direct contract is with the general contractor, not the subcontractor.

  Explanation: The homeowner's agreement is with the general contractor. The plumbing company's agreement is with the general contractor. There is no direct contractual link between the homeowner and the plumbing company, illustrating nonprivity.

• Example 2 (General Nonprivity): A guest staying at a hotel slips and falls on a wet floor in the lobby. The hotel had hired an independent cleaning service to maintain its premises. If the injured guest decides to sue the cleaning service for negligence, they are in nonprivity with the cleaning service. Their relationship is with the hotel, not the third-party cleaner.

  Explanation: The guest has a contractual relationship (implied or explicit) with the hotel, and the hotel has a contract with the cleaning service. The guest and the cleaning service do not have a direct contract, demonstrating nonprivity.

Nonprivity can be further categorized into specific types:

Horizontal Nonprivity

This occurs when the person bringing a claim is not the direct buyer of a product but is someone who consumes, uses, or is otherwise affected by it. They are not part of the direct "chain of distribution" as a purchaser.

• Example 1 (Horizontal Nonprivity): A person receives a new smart speaker as a gift from a friend. While using the speaker, it overheats and causes minor property damage. The injured person did not purchase the speaker themselves but was using the goods. If they sue the manufacturer or the store where the friend bought it, they are in horizontal nonprivity.

  Explanation: The injured party was not the buyer in the sales transaction. They are a user of the product, not a purchaser, which defines horizontal nonprivity.

• Example 2 (Horizontal Nonprivity): A child is playing with a new toy that their parent bought from a toy store. The toy unexpectedly breaks and causes a minor injury to the child. If the child (through their parents) sues the toy manufacturer or the toy store, the child is in horizontal nonprivity with those entities.

  Explanation: The child did not purchase the toy; their parent did. The child is a user affected by the goods, not the buyer, which is characteristic of horizontal nonprivity.

Vertical Nonprivity

This occurs when the person bringing a claim *is* a buyer within the chain of distribution but did not purchase the product directly from the defendant they are suing. There are intermediate sellers between the plaintiff and the defendant.

• Example 1 (Vertical Nonprivity): A consumer buys a new laptop from a large electronics retail store. The laptop was manufactured by a well-known computer company. If the consumer later discovers a significant manufacturing defect and decides to sue the *computer company* directly (rather than just the retail store), they are in vertical nonprivity with the manufacturer.

  Explanation: The consumer is a buyer, but they bought the laptop from the retailer, not directly from the manufacturer. There is an intermediary (the retailer) in the chain of sale between the consumer and the manufacturer, illustrating vertical nonprivity.

• Example 2 (Vertical Nonprivity): A small restaurant owner purchases a large quantity of cooking oil from a local food distributor. The cooking oil was produced and packaged by a major food processing company. If the restaurant owner discovers a serious quality issue with the oil and sues the *food processing company*, they are in vertical nonprivity with that company.

  Explanation: The restaurant owner is a buyer, but they purchased the oil from the distributor, not directly from the food processing company. The distributor acts as an intermediary, creating vertical nonprivity between the restaurant owner and the food processing company.