A Third Party to the Contract Is a Dash to Contract

Six months into the one-year lease, April threw a big party and their guests caused $10,000 in damage to the unit. Burt sent Jessica the damages bill, and in response, Jessica demanded April`s payment. Unfortunately, April left the apartment and avoided Jessica`s attempts to recover the damage and unpaid rent. Since Jessica is the original tenant named in the lease, she is responsible for damage to the unit and is responsible for rents due and fulfills all obligations set out in the original lease. April has no intimacy with Burt; Therefore, Jessica Burt has to pay for the damages or he can take legal action against her. However, she is not defenseless because she can sue April since April is with Jessica. The law allows for full respect for the objective of the parties. In Beswick v. Beswick, it was agreed that Peter Beswick would transfer his business to his nephew in exchange for the nephew employing him for the rest of his life and then pay a weekly pension to Mrs.

Beswick. Since the latter clause was in favour of a person not party to the contract, the nephew did not believe that it was enforceable and therefore did not fulfil it and made only the payment of the agreed weekly amount. But the only reason Mr Beswick signed a contract with his nephew was in favour of Mrs Beswick. By law, Ms Beswick would be able to perform the contract herself. Therefore, the law recognizes the intentions of the parties. Under section 2(h) of the Amerindian Contracts Act of 1872, a contract is an agreement between two parties that is legally enforceable and supported by some consideration. The essence of contract law lies in the commitment that both parties have made to each other in order to perform their part of the contract. As early as 1806, U.S. courts began to recognize that third-party beneficiaries have legal rights. [2] In the landmark Lawrence v. Fox case, Holly lent Fox $300 and Fox agreed to pay Lawrence the $300 to pay a debt owed to Holly Lawrence.

[3] The New York Court of Appeals found that Lawrence was an intended third-party beneficiary of the contract who had rights and was able to perform the contract between Holly and Fox to recover the $300. (2) The beneficiary takes legal action to enforce the contractual promise; or The clearest example of a third-party beneficiary is found in life insurance contracts. A person enters into a contract with an insurance company that requires the payment of death benefits to a third party. This third party does not sign the contract and may not even be aware of its existence, but is entitled to benefit from it. This means that a person named in the contract as a person authorized to perform the contract or a person who receives a benefit from the contract may perform the contract unless it appears that the parties intended not to do so. Beneficiaries and beneficiary creditors may assert their contractual rights, but to do so, both must be intended beneficiaries. The designated beneficiary of a life insurance policy (the person who is to receive the death benefit upon the death of the insured) is a classic example of a beneficiary provided under the life insurance contract. Another exception is the manufacturer`s warranties for its products. In the past, a claim for breach of warranty could only be brought by the party to the original contract or transaction; Consumers should therefore sue retailers for defective goods because there is no contract between the consumer and the manufacturer. Under modern doctrines of strict liability and implied warranty, the right to sue has now been extended to third party beneficiaries, including members of a buyer`s household whose use of a product is foreseeable. Certain standards must be met for the third party beneficiary to have the right to perform a contract or participate in the product.

In particular, the benefit to the third party must be intentional and not accidental. From the above discussion, we have seen that, although only the Contracting Parties can sue each other and no foreigners are allowed to enter between the parties to be sued. But over time, the law has also evolved and now even a foreigner is allowed to sue in extraordinary circumstances in order to protect his interests. Consideration is the most important element of a contract between the parties, unless there is consideration that a contract considers null and void. It is defined in section 2(d) of the Indian Contract Act 1872. The consideration is considered the basis of any contract and constitutes the basis thereof. An example of the third scenario would be if Sandy paid Joan to mow Jane`s lawn. When Jane hears about the deal, she calls her usual landscaping company and tells them she won`t need her services for the next two weeks. Since Jane has relied on Joan`s promise to Sandy to her detriment, she is used as a beneficiary. Sandy can`t let Joan out of the deal without Jane`s consent. (2) Receives execution directly from the promisor; or circumstances that demonstrate that the promisor will grant the beneficiary the benefit of the contract.

[6] A third party beneficiary is more than just a stranger to a contractual agreement. A third-party beneficiary is often a legally protected entity with rights that can enforce the agreement of which it is the beneficiary. The issue of third-party beneficiaries has arisen in cases where a longshoreman has claimed that he falls under the exclusion clauses of a bill of lading. For this to succeed, three factors must be highlighted: 1) The beneficiary accepts the promise in a contract in the manner desired by the parties: the doctrine of the confidentiality of a contract is a common law principle that implies that only the parties to a contract can sue each other to assert their rights and obligations, and no alien may assign obligations to a person, who is not a contracting party, even though the contract was concluded in his favour. The privacy rule is essentially based on the “interest rate theory”, which implies that the only person who has an interest in the contract has the right, under the law, to protect his or her rights. Most of the examples are less clear. .