A . What is a third party beneficiary? b. Distinguish between the following types of third party beneficiaries: creditor beneficiary; donee beneficiary; intended beneficiary, incidental beneficiary. Can all third parties that benefit from a contract sue to enforce rights under the contract? Explain

Answer 1

a . A third party beneficiary is one for whose benefit a promise is made in a contract but who is not a party to the contract.
b. An intended beneficiary is a third party intended by the two contracting parties to receive a benefit from their contract. An incidental beneficiary is a third party whom the two parties to a contract have no intention of benefiting by their contract but who nevertheless will derive some benefit from performance of the contract. A third party is a donee beneficiary if the promisee's purpose in bargaining for and obtaining the agreement with the promisor was to make a gift to the beneficiary. A creditor beneficiary is an intended beneficiary who is a creditor of the promisee. An intended creditor beneficiary can sue either or both parties. An intended donee beneficiary may enforce the contract against the promisor only. An incidental beneficiary has no right to sue to enforce rights under the contract.