When Can A Third Party Be Bound By Or Enforce The Terms Of The Agreement

Two judges stated that the doctrine of the legal effect of the contract produced an injustice when third parties had to benefit from the contract and could not apply it directly – they said it was time to review the laws – they allowed the beneficiaries targeted in this case to receive the benefit – given the commercial reality – this would have been unfair to the insurance company, the risk of turning your back on you. Among the issues raised by some members of the Court were: The rights of a third-party beneficiary are preserved if one of the following three things happens:[9] For example, in a 2012 New York case, Logan-Baldwin v. L.S.M. General Contractors, Inc., homeowners used LSM to restore their homes. LSM hired Henry Isaacs, a subcontractor, to help with the roof. Henry Isaacs then hired Hal Brewster to support the project, but Brewster caused damage to the house and forced the owners to repair the damage themselves. The owners sued LSM and Isaacs for breach of contract. Isaacs argued that the owners were not allowed to enforce their subcontract with LSM because the owners were not intended third-party beneficiaries of the subcontract. The court disagreed and ruled that the owners were third-party beneficiaries of the contract and therefore objected to Isaac`s promise. The court based its opinion on the circumstances of the contract. Isaacs knew that the purpose of the contract was to restore a house for the owners.

The court argued that the circumstances could indicate that there was a third party beneficiary provided for by considering the contract as a whole. [7] But then the benefits of a contract – and not the burden which are the legal obligations – can be transferred without the permission of the other party.