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Chapter 15
Third-Party Rights and Discharge
VI. Answers to Critical Legal Thinking Cases
15.1 Intended or Incidental Beneficiary
Ramos/Carson/DePaul (RCD) was an incidental beneficiary of the Phillies-DH agreement. RCD was not
an intended beneficiary of the Philadelphia Phillies Agreement with Driscoll/Hunt Joint Venture (DH).
The court held that because RCD was merely an incidental beneficiary of the Phillies—DH Agreement,
the Phillies could not be held liable to RCD. RCD had not proffered any evidence to show that the
Phillies and DH intended to give RCD the right to demand payment directly from the Phillies. There is no
15.2 Third-Party Beneficiary
Lucas wins and may recover the $75,000 from Hamm. Generally, contracts made expressly for the benefit
of a third person are enforceable. However, enforcement by persons who are only incidentally or remotely
benefited is not permissible; intent to benefit a third person must be shown. Moreover, no specific
manifestation of such intent is required. It is sufficient that the promisor understood that the promisee had
such intent. The liability to a third party is also a matter of policy involving the balancing of many factors.
Such factors included the extent to which the transaction was intended to affect the plaintiff, the
foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, closeness of the
connection between the defendant’s conduct and the injury suffered, and prevention of future harms. In
this case, the court found that the main purpose of the transaction between the defendant and the testator
15.3 Assignment
been affected by the personalities of successive corporate owners. Cunningham was not obligated to
perform differently for the plaintiffs than he was for the Southern Sports Club. Accordingly, the court
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Fourth Circuit)
15.4 Delegation of Duties
Milford wins and McKinnie must permit the stud services of Hired Chico provided in the Milford-Stewart
agreement. In Texas, a party to a contract may perform his duty through a delegate by assigning or
to perform those duties. This promise is enforceable by either the assignor or the other party to the
contract, and the assignee becomes liable for the contractual performance of the original buyer, even
though the original buyer remains liable on the contract. In this case, the court found that because none of
of Appeals of Texas)
15.5 Condition
Pace wins the lawsuit and does not have to pay OBS. Until a condition precedent is satisfied, the other
terms of the contract are not enforceable. In most subcontract agreements, payment by the owner to the
VII. Answer to Ethics Case
15.6 Ethics Case
standard, the recipient of the work performed must be genuinely satisfied. This includes subjective
satisfaction, although the mere statement by the recipient that he is dissatisfied is not conclusive. Most
courts will recognize the recipient’s dissatisfaction only when he is honestly, even though unreasonably,
dissatisfied and acts in good faith. The good faith standard is employed when the contract involves
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