What is a third-party beneficiary?

A third-party beneficiary is a person or group of people who are not a part of the contract but are still legally entitled to the benefits of the contract. This type of beneficiary is also referred to as an “intended third-party beneficiary”, which means that they have been named as a beneficiary in the contract or have been otherwise identified as a beneficiary. In North Dakota, a third-party beneficiary has the right to enforce the contract if the other parties to the contract fail to do so. This means that they can take legal action to enforce the terms of the contract, such as suing for damages if the terms of the contract are not followed. In order for a third-party beneficiary to be legally recognized in North Dakota, they must be specifically identified in the contract. The contract should clearly state who the third-party beneficiary is and what rights they are entitled to under the contract. Additionally, the contract must be written in such a way that the third-party beneficiary is aware of their rights and can exercise them. The third-party beneficiary must also be expecting to receive the benefits of the contract in order for them to be legally recognized. Third-party beneficiaries are often used in contracts related to estates and trusts, governmental contracts, and insurance policies. In these cases, the third-party beneficiary may not be a party to the contract but they are still entitled to the benefits of the contract. Additionally, third-party beneficiaries play an important role in protecting the rights of parties to the contract by giving them a legal means of enforcing the terms of the contract.

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