Rights of a Third-Party Beneficiary Law Essay Paper (Essay Sample)

Rights of A Third-Party Beneficiary
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Rights of a Third-Party Beneficiary
A third-party beneficiary in contractual law is an individual who has the right to file a lawsuit to enforce a contract even though such a person was not an active party in the signing of the contract. In this case, a person becomes a third-party to a contract if they are the intended beneficiary of the contract being signed by two individuals (Schwartz & Scott, 2015). If a contract is signed by two people with the intent to benefit another person, it is crucial for the involved parties to ensure that the contract agreements are followed to the latter. Failure to adhere to the contract agreement gives the third-party beneficiary the right to sue on the contract to ensure that he or she receives the intended benefit. Therefore, third party beneficiaries have the right to sue on a contract as much as the active parties of the contract.
It is a requirement for the parties involved in a contract to meet certain contractual criteria for a beneficiary to realize the third-party benefits. In this case, an active party has to name the beneficiary for that person to have the right to sue on a contract (Schwartz & Scott, 2015). For instance, an active party may name their children to be the beneficiaries of a health cover. In case the party offering the health cover fails to meet certain contractual requirements by failing to provide the health cover at the required time, the beneficiaries can sue the party providing the health cover citing a violation of a contract. The beneficiaries file a lawsuit since they fall under the category of an intended beneficiary. Contractual law asserts that beneficiaries can file a lawsuit if the purpose of a contract is not realized.