Regional Steel,Inc.,and Overland Transport Company enter into a con-tract. Smooth Oil Corporation,which will indirectly benefit from the deal,is prevented from having rights under the contract by the principle of

Question

Quizplus · Accepted Answer

The principle of privity of contract states that only the parties who have actually entered into a contract have the right to enforce it. Smooth Oil Corporation is not a party to the contract between Regional Steel, Inc. and Overland Transport Company, so it cannot benefit from or have any rights under the contract. This principle prevents assignment of rights to non-parties, which is why answer choices A and D are incorrect. Delegation (answer choice B) refers to transferring obligations to a third party and is not relevant to this scenario.