Exceptions to Privity of Contract in respect of Consumers

Question

Describe in brief about exceptions to Privity of Contract in respect of Consumers in New Brunswick, Novation, Collateral contracts and Exemption clauses?

Answer 1

1. Consumers in New Brunswick: New Brunswick has passed legislation that gives the user of a consumer product a right to sue the seller or manufacturer even though she is not the buyer. In other jurisdictions, consumers may still have recourse against sellers of goods and manufacturers under the tort of negligence.

2. Novation:  A third party replaces an existing party to the contract. The existing party is relieved of the contract's rights and obligations, and the new party assumes them. Novation can also amount to the substitution of a new contract for an old one.

3. Collateral contracts: These implied contracts bind a third party who made a representation or promise that induced a person to enter into a contract with another party. For example, a manufacturer that publishes sales brochures used by dealers can be sued for breach of warranty by the end consumer.

4. Exemption clauses: An exemption clause between the owners of goods and a storage or transportation company may protect employees and intermediaries who are not parties to the contract.