Quiz 18: Third Persons and Contracts


a) False. The assignment refers to the original contract which is the delivery of goods (duty) as well as payment for the goods (rights). b) False. See explanation in a c) True. See explanation in a d) False. A third party beneficiary contract is a contract made for the benefit of the third party. The purchase of goods for one company is not that case.

Third person beneficiary contract An individual or organization that is not a party to the contract, known as third party, but the contract is made for their benefit. E.g. life insurance policy, and a contract to purchase an item for a third party. Third parties have legal rights to enforce these contracts.

a) False. Long is not an intended beneficiary. An intended beneficiary is a third party of the contract designed to benefit from it. The contract is very broad which states to train all high school drop outs of a city. b) False. See a above. Intended beneficiary should be specific, e.g. if the contract was for Graham to train people including L , then L would be an intended beneficiary. c) True. It is incidental that L dropped out of High school. For example, L may have remained in school or continued transfer to another school in another city. d) False. L is not suing as an assignee of the city but as a drop out who was suppose to benefit from it.

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