The principle of privity of contract is considered as one of the well-establishedlegal principles of the English common law according to which the effects of the contract are restricted to the contracting parties only, who are a stranger to the contract. It is worth bearing in mind that only the parties to the contract are entitled to enforce the terms of the contract against each other. They are also able to sue and are sued by one another. It worth-noting that the Iraqi civil law No.40 in 1951 has adopted the same principle and called it the principle of relativity of the contractual effects concerning persons.
It is to be noted also that the principle of the privity of contract in the English law is excluded by two kinds of exceptions: the first one: Jude-made or judicial exceptions, resulting from the judicial precedents of the English courts, underlying the basic of the common law. The second: Statutory exceptions. It should be noted that the Iraqi civil law has also recognized some exceptions to the principle of relativity, the most important of which is the stipulation for another.