In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement?
A)Wholesalers, when the buyer of a business promises the seller that he will pay outstanding debts to wholesalers who have supplied inventory for the business.
B)Workers, where a contractor agrees to post a performance bond to assure payment of workers and material men.
C)A debtor, where a new partner enters an accounting firm and agrees to pay a share of debts incurred prior to his admission to the firm.
D)A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident.

Question

Quizplus · Accepted Answer

In option D, the doctor is a third party incidental beneficiary who would be unable to enforce the agreement as the insurance company's obligation is to its insured only, and the doctor has no contractual relationship with the insurance company. In contrast, in options A, B, and C, the third-party beneficiaries (wholesalers, workers, and creditors) have a direct contractual relationship with the promisor or the promisee, and they could enforce the agreement in court if necessary.

In Which of the Following Situations Is There a Third