Principle of Relativity of Contracts

The principle of relativity of contracts establishes that contracts take effect only between the parties, their assigns, and their heirs. Generally, the rights and obligations arising from a contract are binding only upon those who are direct parties to it.

Exceptions to the Principle of Relativity

The principle of relativity of contracts is subject to certain exceptions recognized by law, stipulation, or the nature of the obligation. These exceptions allow contracts to affect persons other than the original parties in specific circumstances:

• Non-transmissible Rights and Obligations: The contract does not take effect between assigns and heirs if the rights and obligations are not transmissible by their nature, by stipulation, or by provision of law.
• Stipulation Pour Autrui: A stipulation in favor of a third party (stipulation pour autrui) is an exception where the contract benefits a person who is not a party.
• Inducement to Violate Contract: A third person who induces one party to violate a contract may be affected by it.
• Adversely Affected Third Persons: In some cases, third persons may be adversely affected by a contract even if they did not participate in it.
• Accion Directa: The law may authorize a creditor to directly sue on a contract entered into by their debtor (Accion Directa).
• Non-Signatory Benefit: A person who is not a signatory to a contract cannot assume its obligations, but they can take advantage of its provisions if it suits them.