Also known as: intended beneficiary · intended third-party beneficiary · intended third-party beneficiaries · third-party beneficiary · intended third party beneficiary
Written by attorneys · grounded in primary & secondary sources — see below
A third party to a contract who acquires an enforceable right to performance because recognition of that right effectuates the intention of the promisor and promisee and the performance either satisfies an obligation of the promisee to pay money to the beneficiary or the circumstances indicate that the promisee intends to give the beneficiary the benefit of the performance.
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Isabelle Inman purchased a life insurance policy from Black Assurance naming Federal Surety as sole beneficiary and directing that proceeds discharge her outstanding loan balance upon death. After Inman died, Federal Surety demanded payment directly from Black Assurance. Recognition of Federal Surety's right to performance effectuates the parties' intention under the policy and satisfies Inman's obligation to pay money to the beneficiary.
Ilana Isaacs contracted with Iris Energy to construct a solar array on land adjacent to Ibrahim Iqbal's property, with the array designed to supply power directly to Iqbal's manufacturing facility. When Iris Energy failed to perform, both Isaacs and Iqbal sought specific enforcement. Because Iqbal qualifies as an intended beneficiary, either the promisee or the beneficiary may maintain a suit for specific enforcement of the duty owed to him.
Island Manufacturing contracted with Inertia Dynamics for Inertia to pay any future buyer of Island's vehicles the loss from fire or theft within one year after sale. Island later sold a vehicle to Ian Iverson and informed him of the insurance arrangement. Iverson qualifies as an intended beneficiary even though he was not identified when the contract between Island and Inertia was formed.
A farm operator restricted entry to migrant workers housed on his land. Legal services attorneys sought access to provide counseling to the workers. The workers qualify as intended beneficiaries of the statutory and regulatory scheme that funds the attorneys, so the operator cannot insulate the workers from the attorneys' efforts to reach them.
A husband purchased a new automobile from a dealer under a warranty that extended protection to the buyer's family. When the wife suffered injury from a defect, she sued the manufacturer directly. The wife qualifies as an intended beneficiary of the warranty, allowing her to enforce the manufacturer's duty.
A testator retained an attorney to draft a will leaving specific assets to named relatives. The attorney negligently omitted required formalities, causing the bequest to fail. The relatives qualify as intended beneficiaries of the attorney-client contract and may recover damages for the loss of their expected inheritance.
Only intended beneficiaries acquire enforceable rights under Restatement (Second) of Contracts § 302. A third party qualifies when recognition of a right to performance effectuates the parties' intention and the performance either satisfies a money obligation of the promisee or the circumstances indicate an intent to confer the benefit.
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Yes. Where specific performance is otherwise appropriate, either the promisee or the intended beneficiary may maintain a suit for specific enforcement of the duty owed to the beneficiary under Restatement (Second) of Contracts § 307.
…of theories. Some courts hold that the warranty runs with the article like a covenant running with land; others recognize a third-party beneficiary thesis; still others rest their decision on the ground that public policy requires recognition of a warranty made directly to the consumer. Welter v. Bowman Dairy Co. , 318 Ill. App.…
…advice, legal representation, counseling, education, and other appropriate services.” These ends would not be gained if the intended beneficiaries could be insulated from efforts to reach them. It is in this framework that we must decide whether the camp operator’s rights in his lands may stand between the migrant workers and those…
…reason to believe that the Legislature that passed Code of Civil Procedure section 1284.2 contemplated a situation in which the
…appeal presents an opportunity not available in prior cases for South Carolina to join the vast majority of states allowing intended third-party beneficiaries
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No. It is not essential to the creation of a right in an intended beneficiary that the beneficiary be identified when the contract containing the promise is made under Restatement (Second) of Contracts § 308.
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An incidental beneficiary acquires no right to enforce the contract. Performance may benefit a third person, but unless the third person meets the criteria of Restatement (Second) of Contracts § 302(1), no duty to that person is created under § 302(e).
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Yes. Where an intended beneficiary also holds an enforceable claim against the promisee, the beneficiary may obtain judgment against either the promisee or the promisor or both, subject to only one satisfaction under Restatement (Second) of Contracts § 310.
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