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Project Management & Agile · Advanced

Privity of Contract

Legal principle that only the parties to a contract have rights and obligations under it.

Definition

The buyer typically has no direct contractual relationship with a subcontractor; issues must go through the prime contractor.

Example

The PM cannot direct the subcontractor's staff and must work through the prime vendor.

Exam tip

Direct communication with a subcontractor bypassing the prime violates privity.

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