Also known as:stand in the shoes · standing in the shoes · stood in the shoes · stands in shoes of · stand in shoes of · subrogation · succeeds to the rights of
Written by attorneys · grounded in primary & secondary sources — see below
A principle under which an intended beneficiary holding an enforceable claim against the promisee may obtain judgment against the promisee or the promisor or both based on their respective duties. Satisfaction of either duty satisfies the other to the same extent.
Sources & Authorities
How it applies
Common Examples
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Beneficiary May Sue Either Party
Sophia Singh contracted with Sterling Manufacturing to build an affordable housing project and expressly named future low-income tenants as intended beneficiaries entitled to relocation stipends. Sterling Manufacturing failed to pay the stipends. The tenants sued both Sophia Singh on the underlying obligation and Sterling Manufacturing on its promise. Because the tenants stand in the shoes of Sophia Singh, they may obtain judgment against either or both until the claim is satisfied once.
Creditor Beneficiary May Sue Either Party
Sofia Stern owed Summit Bank $80,000 on an unpaid consulting debt. Summit Bank later contracted with Solstice Ventures under which Solstice Ventures expressly promised to pay the debt directly to Sofia Stern. Neither party paid. Sofia Stern sued both Summit Bank on the original debt and Solstice Ventures on its promise. Because Sofia Stern stands in the shoes of Summit Bank, she may obtain judgment against either or both until the debt is satisfied once.
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Uniform Acts
Restatements
Casebooks
Study Supplements
Common questions
Frequently Asked
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Does a third-party beneficiary retain rights after the underlying contract is discharged for impracticability?+
No. The beneficiary stands in the shoes of the promisee, so any discharge that extinguishes the promisee's rights also extinguishes the beneficiary's rights to the same extent.
Supporting sources
Can an intended creditor beneficiary sue both the promisee and the promisor?+
Yes. The beneficiary may obtain judgment against either or both based on their respective duties until the claim is satisfied once. Payment by one reduces the obligation of the other.
Supporting sources
Does regulatory action that makes performance illegal affect a beneficiary's rights?+
Yes. The beneficiary stands in the shoes of the promisee, so public-policy limits that discharge the promisor's duty also discharge or modify the beneficiary's corresponding right.
Supporting sources
Must a beneficiary exhaust collection efforts against the promisee before suing the promisor?+
No. The beneficiary may proceed against either party in any order. Only actual satisfaction of one duty reduces the other.
Supporting sources
200 F. 287 (S.D.N.Y. 1911)Contracts
…of that conduct are immaterial. I have therefore wholly disregarded this portion of Carse’s testimony. [8] The question of subrogation is easily disposed of. There is no subrogation, unless the money used to pay the claim kept alive by subrogation was money on which the party subrogated had in equity some claim, charge, or…