In short
A third-party beneficiary is someone not party to a contract who benefits from it. An intended beneficiary, such as a creditor or donee beneficiary, can enforce the contract; an incidental beneficiary can't.
Key takeaways
- Life insurance beneficiaries are a common example of intended beneficiaries.
- The beneficiary's rights generally vest once they learn of the contract and rely on or accept it.
- After vesting, the parties can't change the beneficiary's rights without consent.
Where it's tested
REG: Business Law: Contracts — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
On June 1, a merchant seller mails an offer to sell goods. On June 3, the seller mails a revocation. On June 4, the buyer mails an acceptance. On June 5, the buyer receives the revocation. Is there a contract?