Which of the following involves a creditor beneficiary relationship?
A) A contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy
B) A contract between an employer and a union representing the employees,which contract is made for the benefit of the employees
C) A contract between the owner of a building and the contractor stating that the contractor will pay his employees at a stated rate
D) A contract between a governmental unit and business for services to be rendered to area citizens

Question

Quizplus · Accepted Answer

A creditor beneficiary relationship is one where the beneficiary of a contract stands to benefit financially from the performance of the contract. In this case, a bank with which the insured has a loan would be considered a creditor beneficiary as it would receive the proceeds from the life insurance policy to repay the loan owed by the insured.

Which of the Following Involves a Creditor Beneficiary Relationship