Randy and Donald were property developers, and they decided to construct a condominium in a certain neighborhood. Jim, who owned a chain of restaurants, heard of this agreement and opened a new restaurant in the same neighborhood even before the condominium construction began. However, the plan for the condominium was not approved by the state authorities, and the project was cancelled. Jim suffered losses as a result, but he had no rights in the contract because he was a(n):
A) material beneficiary.
B) substantial beneficiary.
C) incidental beneficiary.
D) third-party beneficiary.

Question

Quizplus · Accepted Answer

Jim is considered an incidental beneficiary because his interest in the contract (the success of his restaurant in the same neighborhood) was not the primary purpose of the contract between Randy and Donald. As an incidental beneficiary, he has no rights to the agreement and cannot claim damages when the project was cancelled.

Randy and Donald Were Property Developers, and They Decided to Construct