CONTRACT LAW — Privity — Stranger to Contract or Policy Statement Cannot Enforce Rights Thereunder
Principle Statement
A policy statement or guideline whose non-implementation does not entitle a party to legal redress does not create a contractual relationship. Only parties to a contract can maintain an action thereunder under the principle of privity of contract.
Ratio Decidendi (Source)
Per Edozie, JSC, in Ebhota & Ors. v. Plateau Investment and Property Development Co. Ltd. (2005) NLC-3022000(SC) at p. 20; Paras B–D.
"In my humble view, the above excerpt of part of paragraph 3 of exh. 2 is merely a policy statement or guideline, the non implementation of which does not entitle the appellants to a legal redress against the respondent. It did not create a contractual relationship between the parties to this appeal. … This is on the principle of privity of contract which recognises that only parties to a contract can maintain an action thereunder."
Explanation / Scope
Only parties to a contract can sue or be sued on it. A policy statement or guideline does not create contractual rights. The principle applies to contract law. The rule prevents strangers from enforcing agreements to which they are not parties. Non-implementation of a policy statement is not legally actionable. Legal redress requires a binding contractual relationship.
