Law:

Section:

DOCTRINE OF PRIVITY OF CONTRACT: It postulates that contractual obligations and rights are confined exclusively to those who have entered into the agreement with free consent and lawful consideration. A contract neither creates rights nor imposes liabilities upon persons who are not parties to it. Consequently, enforcement proceedings cannot be extended, either directly or indirectly, to bind third parties who were neither signatories nor privy to the contractual arrangement. This principle has consistently been affirmed that a compromise, settlement, or agreement is enforceable only inter se the parties to it and cannot prejudice or affect the rights of non-parties. In practical terms, therefore, enforcement of a contract ensures compliance with agreed obligations only within the four corners of the agreement. Any attempt to give effect to such an agreement against third parties, or to disputes alien to its subject-matter, would amount to rewriting the contract and would offend the settled principles of equity, justice, and good conscience. Courts are duty bound to enforce contracts as they are, not as one party subsequently wishes them to be, and only against those who consciously undertook the obligations contained therein. Thus, while enforcement of a contract remains a vital legal mechanism to uphold the sanctity of agreements, its operation is strictly limited to the contracting parties and cannot, in law or equity, be invoked to bind others who were never part of the contractual bargain.