Post History

What semantic notions underlie 'privity' with 'privity of contract'?

The [_OED_ 3 ed, June 2007](https://www.oed.com/view/Entry/151634) defines

>**b.   privity of contract** _n._ the limitation of a contractual relationship to the two parties making the contract, which prevents any action at law by an interested third party such as a beneficiary.

but doesn't expound why "privity" fits, or was adopted for, this meaning of contract law. 

I read Prof. Vernon Valentine Palmer [LLM Yale, DPhil Oxon](https://law.tulane.edu/faculty/full-time/vernon-palmer), [_The paths to privity : the history of third party beneficiary contracts at English law_](https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.354794), but it doesn't explicitly answer my question.  

[Page 6](https://books.google.com/books?id=bYPMDK7PeY4C&lpg=PP1&dq=The%20Paths%20to%20Privity%3A%20The%20History%20of%20Third%20Party%20Beneficiary%20Contracts%20at%20English%20Law%20by%20Vernon%20V.%20Palmer%20The%20Paths%20to%20Privity%3A%20The%20History%20of%20Third%20Party%20Beneficiary%20Contracts%20at%20English%20Law%20by%20Vernon%20V.%20Palmer&pg=PA6#v=onepage&q=The%20Paths%20to%20Privity:%20The%20History%20of%20Third%20Party%20Beneficiary%20Contracts%20at%20English%20Law%20by%20Vernon%20V.%20Palmer%20The%20Paths%20to%20Privity:%20The%20History%20of%20Third%20Party%20Beneficiary%20Contracts%20at%20English%20Law%20by%20Vernon%20V.%20Palmer&f=false)

>      We must begin with the fact that early law was virtually silent as to 
the definition of privity and that the etymology of the term is very distant from 
our present usage. In some legal texts, such as Rastell's _Termes de La Ley_
(1624) and Edmund Wingate's _Maximes of Reason_ (1658), privity was given 
much attention and several kinds of privity were listed, together with 
numerous examples, but the authors ventured no definitions and conveyed 
little hint of its function in the law." These writers had to proceed 
cautiously because privity connoted a series of ideas: privacy, secrecy, 
knowledge, interest, and relationship.21 

Page 7

>      Dr. Johnson's first dictionary (1755)2 stated that the word originally 
came from the old French term privauté meaning privacy, but this dictionary 
also noted that the contemporary 18th century meaning was "joint knowledge" 
and "great familiarity." In Kelham's _Dictionary of the Norman or Old French 
Language_ (1779), the French term "privities" is rendered in English as 
and the notion of secrecy lingers in another definition current in 
the 18th century: "Private knowledge, as a woman is said to do a thing without 
her husband's privity."24 The noun privy derived from the French privé and 
originally signified a friend or acquaintance (as opposed to a stranger). When 
used as an adjective or an adverb, _privy_ came to be identified with intimate 
knowledge and familiarity, as in the expression "he is privy to the affair."2S 
The transition from the concept of privacy (privauté) to that of knowledge and 
familiarity is perhaps understandable. In the privacy of the family, for 
example, persons were permitted to know one another's affairs, and in the 
privacy of correspondence% and meetings, personal knowledge was shared, 
though not with the world at large. But privity acquired more abstract legal 
connotations such as "interest" and "relationship," an evolution which seems 
more difficult to explain. The transition is shown in John Cowell's statement 
in 1607: "Privie commeth of the French (privie i. familiaris) and signifieth in 
our common lawe, him that is partaker, or hath an interest in any action, or 
thing."27 A modern legal dictionary similarly indicates that while privity 
originally meant "knowledge," it now denotes in a secondary sense "a peculiar 
relation in which a person stands either to a transaction or to some other 

Page 8

>person.

>       This transition suggests that privity _the fact_ became a source of 
obligations when legal meaning was attached to the personal bond or *inward 
relation" resulting from knowledge and familiarity? Contracts, for example, 
have a recurrent factual basis in the privacy of meetings, discussions, and 
personal dealings.30 The word covenant still indicates this original basis. 
Well before it came to signify a promise or an action at common law, 
covenant meant a convening, an assembly, or a "coming together," and those 
who were not there could not know nor perhaps accurately relate what had 
transpired.31 From the fact of close relationship would follow the concept of 
the closed circle. Outside the circle are strangers who can be neither 
benefitted nor burdened by the rights or duties concerned. The number of 
these circles is almost infinite, but duties and relationships are kept quite 
distinct. A's debt to his friend B places them together in the duty circle, but 
B would be a stranger toward A with respect to A's dealings with someone 
else. The size of the circle and the number of privies within it would vary, 
depending upon the scope of the duty and its real or personal nature." 
Furthermore, those originally outside the circle may be drawn into it when 
they acquire rights or assets with knowledge or notice of the existing state of 
affairs between parties."