Which option best describes contractual privity in a general construction contract?

The concept of contractual privity establishes the relationships and obligations between parties involved in a contract. In the context of a general construction contract, the focus is on the direct contractual relationships that exist.

When one states that the engineer has no direct contractual relationship with the owner, it highlights a key aspect of contractual privity: the relationship is predominantly between the owner and the contractor, while the engineer typically holds a separate agreement with the owner that does not create privity of contract concerning the obligations of the contractor. This means that the owner cannot directly enforce contractual obligations against the engineer solely because the engineer is working on behalf of the owner.

In construction contracts, many times the contractor operates under a direct agreement with the owner, which establishes their rights and responsibilities specifically towards each other, while the engineer may be involved in overseeing the project without having direct legal obligations to the owner. Hence, the delineation in responsibilities is crucial for understanding the nature of contractual privity.

This distinction clarifies that while the engineer plays a significant role in the project, their contractual obligations may lie elsewhere, which reinforces the idea of limited privity specifically in relation to the parties involved in the construction contract.