The legal doctrine of deprivation of contract means only parties to a contract have obligations and rights. Third parties have no rights, but can obtain them through assignment, delegation, or third-party beneficiary contracts.
According to the legal doctrine of deprivation of contract, only the parties to a contract have obligations to each other and realize the benefits arising from the contract. The contracting parties also have the option of suing each other for breach of contract. While contracting parties have rights and responsibilities, third parties generally have no rights and no obligations.
For example, John and Jane are parties to a contract, whereby John has agreed to supply Jane, who runs a tuxedo rental company, with 200 tuxedos by a certain date. In turn, Jane agreed to supply Bob with 50 tuxedos for an upcoming concert. If John fails to provide Jane with tuxedos, Jane can sue him as they are out of contract with each other. Bob could even sue Jane for breach of contract if Jane doesn’t deliver the tuxedos. However, Bob cannot sue John because Bob and John do not have a contract between them and John owes Bob no obligations.
In some cases, however, third parties may obtain the right to deprivation of the contract. Assignment is one of these modalities, and occurs when one of the contracting parties, called the transferor, transfers his rights or duties deriving from the contract to a third party, called the transferee. After the assignment, the assignor loses his contractual rights and the assignee receives the rights previously enjoyed by the assignor. The assignor is no longer responsible for fulfilling the obligations under the contract and the assignee must fulfill any of the obligations of the assignor.
It can also be transferred to third parties by delegating tasks. In this case, one of the contractors, called the delegating party, transfers part of his duties to a third party, called the delegate. The delegate is required to perform these tasks. Unlike an engagement, if the delegate fails to perform, the mandator would ultimately remain responsible for performing the contractual obligations.
Some contracts designate third-party beneficiaries, who therefore enjoy some degree of contract deprivation. In a typical third-party beneficiary contract, the contracting parties expressly agree that a third party is intended to benefit from the contracting parties’ performance of the contract. If the contracting parties fail to fulfill their duties, the third party beneficiary is generally entitled to claim damages. In the tuxedo example above, for example, if Bob had been a third-party beneficiary, he could have sued John for damages if John had not delivered the tuxedos to Jane.
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