Intended and Incidental Beneficiaries (Third-Party Beneficiaries: Intended Beneficiaries) - Mar. 20

Question 1

What is an incidental beneficiary? (R)

Answer 1

An incidental beneficiary is a beneficiary who is not an intended beneficiary. (302)

Question 2

Unless otherwise agreed between promisor and promisee, when is a beneficiary of a promise an intended beneficiary? (R)

Answer 2

A beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either:

(a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or

(b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. (302)

Question 3

What duty does a contract make towards an intended beneficiary? (R)

Answer 3

A promise in a contract creates a duty in the promisor to any intended beneficiary to perform the promise, and the intended beneficiary may enforce the duty. (304)