Legal Definitions - privies

The term privies refers to individuals or entities who have a direct, legally recognized connection to a particular legal matter, transaction, or property. This connection means their rights, interests, or obligations are derived from or are directly affected by the original matter, often as if they were the original party themselves. They are not strangers to the legal situation but stand in a relationship of "privity" with another party. Essentially, privies are those who are so connected to a legal action or interest that they are bound by or entitled to the same rights and duties as the original party.

Here are some examples illustrating the concept of privies:

• Example 1: Business Contracts and Successors

  Imagine a small software company, "InnovateTech," signs a long-term contract with a client to provide ongoing technical support. A year later, InnovateTech is acquired by a larger corporation, "Global Solutions Inc." As part of the acquisition, Global Solutions Inc. takes over all of InnovateTech's existing contracts and obligations. In this scenario, Global Solutions Inc. becomes a privy to the original technical support contract. It is now bound by the terms of that contract and must provide the support to the client, just as InnovateTech was.

• Example 2: Property Ownership and Encumbrances

  Consider a homeowner, Ms. Chen, who grants an easement to her neighbor, Mr. Davis, allowing him to use a specific path across her backyard to access a public park. This easement is legally recorded. Years later, Ms. Chen sells her house to Mr. Rodriguez. When Mr. Rodriguez purchases the property, he becomes a privy to the easement agreement. He cannot prevent Mr. Davis from using the path, even though he was not the original party who granted the easement, because his property rights are directly affected by the prior agreement made by Ms. Chen.

• Example 3: Legal Judgments and Related Parties

  Suppose a construction company, "BuildFast," is sued by a client for faulty workmanship on a building project and a court issues a judgment against BuildFast. Before the judgment is fully satisfied, BuildFast declares bankruptcy and its assets and liabilities are transferred to a newly formed company, "Reliable Structures LLC," which is essentially a continuation of the same business operations under a new name. In this situation, Reliable Structures LLC might be considered a privy to the original lawsuit and judgment. The court's ruling against BuildFast could therefore be enforced against Reliable Structures LLC, as they are considered to be in privity with the original defendant.