Asked by Shaniqua Esdaille on Jul 05, 2024
Verified
What is a third-party beneficiary? Does that party always need to be listed in the contract?
Third-Party Beneficiary
An individual or entity that is not directly involved in a contract but stands to benefit from it as specified by the contracting parties.
Contract
A legally binding agreement between two or more parties that outlines obligations and rights with respect to each other.
Listed Party
An individual or entity that appears on a list due to certain criteria, often used regarding sanctions, where listed parties are restricted from certain transactions and relationships.
- Acquire knowledge on the duties and privileges of intended, incidental, and creditor beneficiaries in the context of contract law.
- Understand the legal differences among donee beneficiaries, creditor beneficiaries, and incidental beneficiaries.
Verified Answer
CW
Connor WagnerJul 11, 2024
Final Answer :
A third-party beneficiary is created when two parties enter into a contract with the purpose of benefiting a third party, called an intended beneficiary. The beneficiary need not be named in the contract as long as the terms of the contract or events occurring after its creation make it clear who he or she is.
Learning Objectives
- Acquire knowledge on the duties and privileges of intended, incidental, and creditor beneficiaries in the context of contract law.
- Understand the legal differences among donee beneficiaries, creditor beneficiaries, and incidental beneficiaries.