Privity

Privity of contract is the rule that only a party to a contract can sue or be sued on it, which historically barred a consignee or indorsee from enforcing a bill of lading and barred stevedores from relying on its defenses. Shipping practice works around it with the Himalaya clause, the Brandt v Liverpool implied contract, and statutory transfer of suit rights under COGSA 1992 in England and third-party-benefit legislation elsewhere. The word also appears in marine insurance, where the assured’s privity to unseaworthiness defeats cover.