BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The Indian Contract Act. 1872, allows the ‘Consideration’ for an agreement to proceed from a third-party. However, a stranger (third-party) to consideration is different from a stranger to a contract. The law does not allow a stranger to file a suit on the contract.

Detailed explanation-2: -It means that under Indian Law a person may not have himself given any consideration but he can enforce the contract if he is a party to the contract. In India the rule “stranger to contract cannot sue” (Privity of Contract) has to be distinguished from the rule “stranger to consideration can sue”.

Detailed explanation-3: -4.2 Stranger to consideration In the Indian Contract Act, in order to constitute a valid contract, the consideration may move from the promisee or any other person. In case, the consideration moves from a person other than the promisee, the promisee can be categorized as a stranger to the consideration.

Detailed explanation-4: -It can manifestly be seen in the wordings of the statute itself that a consideration can be given or fulfilled by any other person. Therefore, in India stranger to consideration can sue.

Detailed explanation-5: -Under Indian Law, a stranger to consideration can file a suit to enforce the promise. If a person is not a party to a contract, he is called a stranger to contract. This is a cardinal principle of law that only a party to a contract can sue.