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Introduction—What Is Privity?

Simply put, “privity of contract” is “‘the relationship between the parties to a contract, allowing them to sue each other but preventing a third party from doing so.”[1] The existence of ‘privity’ had long protected an architect in a contractual relationship with an owner or some other entity from potential liability to a contractual stranger. However, in recent years, there has been a significant amount of litigation interpreting whether the essential existence of that relationship continues to be a valid defense for a design professional from liability against those with whom the design professional does not have a direct contractual relationship, such as a contractor, subcontractor, or injured third party. If privity remains a valid defense, a contractor, subcontractor, or injured third party has valid basis to file a claim or lawsuit against an architect for deficiencies in the his or her work. Instead, such claims could only be made against the owner of the project or whomever the contractor, subcontractor, or injured party has a direct contractual relationship with relating to the project in question.
While lack of privity is still a valid defense in some jurisdictions, there has been a clear trend in many states to modify or, worse, completely abandon this defense that has benefited architects and engineers for so long. This article includes a brief discussion on the status of the law on the privity defense for a design professional in numerous jurisdictions and the approaches being used to uphold or limit such defense.

The Traditional Rule—If There is No Contract, There is No Duty or Right to Sue

Several jurisdictions continue to follow the traditional rule of contract law and hold that privity of contract is required to prevail on claims against design professionals. Texas, for instance, has long held that design professional who has a contract with an owner does not have a separate duty to a contractor or subcontractor who works on the same project absent privity of contract.[2] In two recent Texas cases, this position was again reinforced when it was held that a design professional has no duty to a third party injured as a result of negligence by a design professional.

[1] Black’s Law Dictionary (10th Ed. 2014).

[2] Bernard Johnson, Inc. v. Continental Constructors, Inc., 630 S.W.2d 365, 375-76 (Tex. App.--Austin 1982, writ ref'd n.r.e.).

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