PRIVITY OF CONTRACT.
PERHAPS the tradition in the elementary law of contracts most thoroughly grounded in the minds of law students is the general proposition that an agreement between A and B cannot be sued upon by C, even though C would be benefited by its performance. It always was, with Harvard law students at all events, an article of faith that rights founded on contract belong to the person who has stipulated for them; and that even the most express agreement of contracting parties would not confer any right of action on the contract upon one not a party thereto.[1] Indeed, it so happened that almost my first experience, as the callow practitioner, occurred in naïvely asking a New York Court to rule that a plaintiff, being privy neither to the promise made by the defendant to a third party, nor to the consideration given for it, has no standing in court, in seeking to enforce its performance. But the New York Court had different notions, and would rule no such thing. I was informed that the doctrine in that shape had long since been exploded, and that jurisprudence had advanced to a stage where the law operating on the act of the parties created the duty, established the privity, and implied the obligation on which the action is founded. And, upon further investigation, I actually found that no less learned a body of judges than the New York Court of Appeals had, in words at least, distinctly made this legal somersault, and had apparently succeeded in legislating the old principle out of existence.[2]
More than that, before it could recover itself sufficiently to appreciate what had happened, the departure was seized upon with avidity in other jurisdictions, and the heresy is to-day in some States well-established doctrine. The New York Courts, however, were soon put on the defensive, and, pitifully and apologetically squirming and shifting under the heavy burden, began to limit the new rule and hem it about, and to refuse to apply it to cases differing in any of their circumstances from precedents that were not fac-similes, until to-day its inventors would hardly recognize their creature. We find a never-ceasing pricking of conscience.
