Don lives in an old, run-down house on Main Street next door to Liz. Don enters into a contract with Ace Construction to remodel his house, which makes Liz and the others in the neighborhood excited, because they think it will increase their own home value. What type of third party beneficiary is Liz

Liz and his neighbors are third party beneficial. Third party are people that benefit from the agreement between two person. They may not necessarily be included in the contract as in the case of Liz. To have a legal right, a third party must be intended as part of the beneficiary.

Liz and neighbor are incidental beneficiary because they are not legally bind to the contract, any benefits that comes from Dons's agreement with the construction is considered as an incident and if the benefits does not flow again they cannot be sued or challenged.

Intended beneficiary are usually part of the contract and they have legal right in the agreement.