A company enters into a contract with a landscaping service to maintain the property of its employee as part of a relocation package. The employee is not a party to the contract but is the intended recipient of the landscaping services. What type of third-party beneficiary is the employee under contract law?
The correct answer is that the employee is an 'intended beneficiary.' An intended beneficiary is someone the contracting parties explicitly intend to benefit and who has enforceable rights under the contract. The landscaping services were specifically arranged to benefit the employee, establishing intent between the contracting parties to provide some service or performance directly to this third party. Incidental beneficiaries, by contrast, may benefit from the performance of a contract but were not intended by the parties to have any enforceable rights. Donee beneficiaries and creditor beneficiaries are subsets of intended beneficiaries depending on the purpose of the contract, but the general category of 'intended beneficiary' is correct in this context.
Ask Bash
Bash is our AI bot, trained to help you pass your exam. AI Generated Content may display inaccurate information, always double-check anything important.
What is an intended beneficiary?
Open an interactive chat with Bash
What differentiates intended beneficiaries from incidental beneficiaries?
Open an interactive chat with Bash
Can you explain what donee and creditor beneficiaries are?