What is a third-party beneficiary?

A third-party beneficiary is a person who benefits from a contract between two other parties, even though they are not a direct party to the contract. Basically, this means that a third-party beneficiary is not a party to the contract but is still entitled to enforce rights under the contract. In California, a third-party beneficiary is considered to have the rights to sue and be sued by a contracting party when the contract was made for their benefit. For example, if a contract states that one party will provide services to a third-party beneficiary, the beneficiary may sue the other party if they do not fulfill their obligation. Similarly, the third-party beneficiary may also be sued by the other party if they fail to fulfill their obligations under the contract. Thus, third-party beneficiaries are an important part of contract law in California, as they allow parties to contract for the benefit of others, even though they are not a party to the contract. Moreover, California law provides third-party beneficiaries with substantial rights, such as the right to sue and be sued, which can ensure that contracts are enforced.

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