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VERTICAL PRIVITY

TheLaw.com Law Dictionary & Black's Law Dictionary 2nd Ed.

A legal relationship in corporate law that exists between companies in the chain of distribution of a product. This relationship creates responsibilities between the companies involved, including being liable for defects in the product. For example, vertical privity exists between the manufacturer of a car and the dealership that sells it. Therefore, both the dealer and the manufacturer are liable for defects in cars sold by the dealership.

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