This chapter introduces the doctrine that allows certain nonparties to enforce promises made for their benefit while excluding merely incidental beneficiaries. The Red Book provides a natural narrative connection, emphasizing how agreements can be made with absent but intended recipients in view.
Doctrinal map
R2d § 302 distinguishes intended beneficiaries (may enforce) from incidental beneficiaries (may not). Lawrence v. Fox is the doctrinal founder of intended-beneficiary enforcement. Sovereign Bank v. BJ’s Wholesale shows the limit: a party benefiting incidentally from a private regulatory framework cannot enforce. The chapter also introduces assignment and delegation (R2d §§ 317–322), including when contract rights cannot be assigned (material change in obligor’s duty) or duties cannot be delegated (personal-service contracts).
Key Sources
Key Rules
- R2d § 302: Intended vs. incidental beneficiaries
- R2d § 304: Government contracts — general public usually incidental
- R2d § 311: Promisor's defenses against beneficiary
Cases
- Lawrence v. Fox 20 N.Y. 268 (1859) Where one party makes a promise to another for the benefit of a third person, that third person may enforce the promise even though he is not a party to the contract and gave no consideration for the promise. The third-party creditor beneficiary has a direct right of action against the promisor.
- Sovereign Bank v. BJ's Wholesale Club, Inc. 533 F.3d 162 (3d Cir. 2008) A party benefiting incidentally from a contract designed to operate within a private regulatory system has no right to enforce the contract as an intended third-party beneficiary. Where the contract and the surrounding regulations channel enforcement through specified internal mechanisms, the third party is at most an incidental beneficiary.