Tyron purchased a vacant lot and entered into a contract with BZ Inc. to construct a shopping center on the site. Douglas heard about this contract and built a restaurant on an adjoining piece of property because of the planned shopping center. Tyron was unable to raise the necessary capital and was unable to perform the contract with BZ, Inc. What type of third party beneficiary is Douglas? Can Douglas sue Tyron to enforce the contract?

Question

Giovani Riggs

Business

25 December, 09:12

Tyron purchased a vacant lot and entered into a contract with BZ Inc. to construct a shopping center on the site. Douglas heard about this contract and built a restaurant on an adjoining piece of property because of the planned shopping center. Tyron was unable to raise the necessary capital and was unable to perform the contract with BZ, Inc. What type of third party beneficiary is Douglas? Can Douglas sue Tyron to enforce the contract?

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Answers (1)

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Cervantes · Answer 1

Douglas is Incidental beneficiary Douglas cannot sue Tyron to enforce the contract.

Explanation:

In the above scenario, Douglas is an incidental beneficiary is a third party who benefits from a contract between Tyron and BZ, Inc., but it is not intended that the third party benefit.

Further, the incidental beneficiaries do not have the legal right to enforce a contract after it has been breached. So, Douglas cannot sue Tyron to enforce the contract.