What is a third-party beneficiary?

A third-party beneficiary is a person who is not a party to a contract, but is still legally entitled to benefit from it. This occurs when one of the parties to the contract, known as a promisor, agrees to provide a benefit to someone other than themselves or the other party to the contract, known as a promisee. In Washington, a third-party beneficiary must be expressly identified in a contract, so that the parties to the contract understand that a third-party beneficiary is intended to receive some benefit from the contract. This third-party beneficiary may be a person, such as a family member, or it could even be a company. Once the third-party beneficiary is identified in the contract, they can enforce the contract like any other party to the contract. This means that the third-party beneficiary can take legal action if the promisor fails to fulfill their promise, such as by asking a court to award them damages or ordering the promisor to complete the contract. It is important to note that in Washington, the third-party beneficiary must have a legal interest in the contract before they can enforce it. For example, the third-party beneficiary must have a particular interest in the subject matter of the contract, such as if they are a relative of one of the parties, or if they are a business that will benefit from the contract.

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