Third Party Beneficiary To A Contract
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FAQ
Even though there is no contract privity among the third-party beneficiary and contracting parties, the third-party beneficiary may still have the right to sue them to enforce the contract or seek damages for the breach.
The clearest example of a third-party beneficiary is found in life insurance contracts. An individual enters into a contract with an insurance company that requires the payment of death benefits to a third party.
Even though there is no contract privity among the third-party beneficiary and contracting parties, the third-party beneficiary may still have the right to sue them to enforce the contract or seek damages for the breach.
party beneficiary, in the law of contracts, is a person who has the right to sue on a contract, despite not having originally been a party to the contract and/or a signer of the contract. There are two kinds of thirdparty beneficiaries: an ?intentional or intended? beneficiary and an ?incidental? beneficiary.
So, if Robert hires John to shovel Bob's snow, he is doing so to offset his own contractual obligation. Bob is therefore an intended third-party creditor beneficiary. Both donee and creditor beneficiaries can enforce contract rights, but to do so, both must be intended beneficiaries.