Sarah enters into a contract with Jake to paint her house. The contract specifies that payment will be made directly to Linda, Sarah's sister, as part of a gift to support Linda's small business. Linda does not sign the contract and is not a party to it. Which of the following best describes Linda's ability to enforce the contract?
Linda has limited rights under the contract since she is not a party.
Linda can enforce the contract if she assigns her rights to another party.
Linda is an incidental beneficiary and is not able to enforce the contract.
Linda is an intended third-party beneficiary and can enforce the contract.
Linda is an intended third-party beneficiary because the contract specifies that payment is for her benefit. As an intended beneficiary, she has the right to enforce the contract. The other options either describe incidental beneficiaries or do not recognize her proper status under the contract.
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What is an intended third-party beneficiary?
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How is an incidental beneficiary different from an intended beneficiary?
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What factors determine a third party's ability to enforce a contract?
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