Fact Pattern 16-A1
Business Properties, Inc. , contracts with Corporate Builders, Inc., to construct an office building. BPI agrees to obtain insurance to cover the project, after which the parties waive their rights against the subcontractors. BPI ob?tains the policy from Debit Insurance Company. When the new building is destroyed in a storm, Debit pays BPI and files a suit against the subcontractors.
-Refer to Fact Pattern 16-A1. Under the reasoning of the court in Case 16.2, Midwestern Indemnity Co. v. Systems Builders, Inc., in relation to the waiver in BPI's contract with Corporate Builders, the subcontractors are
A) incidental beneficiaries and thus liable to Debit.
B) incidental beneficiaries and thus not liable to Debit.
C) intended beneficiaries and thus liable to Debit.
D) intended beneficiaries and thus not liable to Debit.

Question

Fact Pattern 16-A1 
Business Properties, Inc. , contracts with Corporate Builders, Inc., to construct an office building. BPI agrees to obtain insurance to cover the project, after which the parties waive their rights against the subcontractors. BPI ob?tains the policy from Debit Insurance Company. When the new building is destroyed in a storm, Debit pays BPI and files a suit against the subcontractors.
-Refer to Fact Pattern 16-A1. Under the reasoning of the court in Case 16.2, Midwestern Indemnity Co. v. Systems Builders, Inc., in relation to the waiver in BPI's contract with Corporate Builders, the subcontractors are
A) incidental beneficiaries and thus liable to Debit.
B) incidental beneficiaries and thus not liable to Debit.
C) intended beneficiaries and thus liable to Debit.
D) intended beneficiaries and thus not liable to Debit.

Quizplus · Accepted Answer

The court in Midwestern Indemnity Co. v. Systems Builders, Inc. held that if the waiver of subrogation clause is intended to benefit the subcontractors, they are considered intended beneficiaries and are not liable to the insurer seeking subrogation. Since the fact pattern states that the parties waived their rights against the subcontractors, it can be inferred that the waiver clause was intended to benefit the subcontractors. Therefore, they are not liable to Debit Insurance Company.