Third Party Beneficiaries

This lesson deals with third party beneficiary contracts. The initial questions in this exercise are intended to familiarize students with the various types of contract beneficiaries. Since there is no general agreement on terminology, the questions test the students on both the First Restatement of Contracts types, i.e., creditor, donee, and incidental, and the Second Restatement of Contract types, i.e., intended and incidental. Subsequent questions deal with vesting of contract beneficiaries' rights and with defenses which can be asserted by a promisor against a beneficiary.

Learning Outcomes

On completion of the lesson, the student will be able to:

1. Determine which third parties may enforce a contract.
2. Determine when the rights of a third party vest.
3. Determine the defenses that may be asserted against a third party.