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privity, privy - vocabulary

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noun

Privity: knowledge shared with another or others regarding a private matter. In law, a relationship between or among parties, typically to a contract.

Privy: an outhouse; a person having an interest in a legal transaction or legal relationship. As an adjective, participating in the knowledge of something private, usually followed by to, as in We are privy to his plan.

Note on the law: Historically, privity between the parties was required for tort liability to exist. So if Joe buys a defective car and sells it to Pete and Pete is injured, Pete could not sue the manufacturer that sold the car to Joe. Today, however, subsequent purchasers, who were obviously not privies to the original contract first signed years ago, may sue, despite the lack of privity. Warranty statutes and strict products liability have done much to relegate the requirement of privity of contract to the ash heap of history.

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