What term describes the relationship that exists between the parties to a contract?

• A. Standing to sue
• B. Privity of contract
• C. Exhaustion of administrative remedies
• D. Final order

Answer: (B)

Privity of contract describes the relationship that exists between the parties to a contract. It means that only those who sign the agreement have enforceable rights and duties under it, and only they can sue to enforce its terms or be sued for breach. This concept explains why someone who is not a party to the contract generally cannot enforce its promises.

The other terms refer to procedural or standing issues rather than the contractual relationship. Standing to sue concerns who may bring a lawsuit based on injury or interest; exhaustion of administrative remedies is about completing required administrative steps before pursuing litigation; a final order is an administrative agency’s decision resolving a dispute.