Third Party Beneficiary

Question 1

3rd Party Ben General Rule

Answer 1

• A contract whereby the contracting parties agree that performance will be rendered (will be given) to a third party, who is not one of the contracting parties.

Question 2

Types of Third-Party Beneficiaries

Answer 2

1. Intended
2. Incidental

Question 3

Intended Third-Party Beneficiary

Answer 3

1. The contracting parties expressly intend for a third party to receive the benefit of the contract. The third party is named in the contract.
2. Because the third party is named in the contract, the third party can sue for non-performance.

Question 4

Incidental Third-Party Beneficiary

Answer 4

1. In order for an offeror to perform, the offeror needs the assistance of a third party. This third party is not named in the contract but will benefit from the contract by receiving something of value from the offeror in return for assisting the offeror. The offeror can select any third party.
2. Since the third party is not named in the contract, the third party cannot sue for non-performance.