III. Third-Party Beneficiary Contracts

Question 1

Third Party Beneficiary Ks

Answer 1

When 2 parties K w/ the u/s and intent that performance by one of the parties is to be rendered to a third person.

Question 2

Intended beneficiary

Answer 2

Third party can recover if she is an intended beneficiary.

Intended beneficiary: one to whom the promisee wishes to make a gift of the promised performance or to satisfy an obligation to pay more money owed by promisee to beneficiary; has the right to bring and action on the K

Question 3

Incidental beneficiary

Answer 3

One who benefits from a K even though there is no contractual intent to benefit that person; no right to enforce the K.

Question 4

Vesting of beneficiaries rights

Answer 4

Rights of intended beneficiary vest when beneficiary: detrimentally relies on rights created, manifests assent to K at one of the parties requests, or files lawsuit to enforce K.

Question 5

Defenses

Answer 5

Promisor can raise any defense against a third party that he had against original promisee.