Which statement describes a third-party intended beneficiary's rights?

Which statement describes a third-party intended beneficiary's rights?

• A. A third-party intended beneficiary can sue for breach if the promisee's performance would satisfy a duty owed to the beneficiary.
• B. An incidental beneficiary can sue for breach if the contract discusses them.
• C. A donee beneficiary has no rights to sue.
• D. An intended beneficiary cannot sue if there is a novation.

Answer: (A)

The key idea is that an intended third-party beneficiary has enforceable rights against the promisor when the contract promises to perform in a way that would discharge a duty owed to that beneficiary. If the promisee’s performance would satisfy a duty the promisee owes to the beneficiary, the beneficiary may sue to enforce the promise. This is what makes the beneficiary's right arise from the contract—they were intended to benefit from it. Incidental beneficiaries have no such rights, even if the contract mentions them. A donee beneficiary is a type of intended beneficiary and does have the right to sue. A novation changes who is obligated under the contract, but it doesn’t automatically negate the beneficiary’s ability to sue the promisor or the new promisor depending on the new arrangement.

The key idea is that an intended third-party beneficiary has enforceable rights against the promisor when the contract promises to perform in a way that would discharge a duty owed to that beneficiary. If the promisee’s performance would satisfy a duty the promisee owes to the beneficiary, the beneficiary may sue to enforce the promise. This is what makes the beneficiary's right arise from the contract—they were intended to benefit from it.

Incidental beneficiaries have no such rights, even if the contract mentions them. A donee beneficiary is a type of intended beneficiary and does have the right to sue. A novation changes who is obligated under the contract, but it doesn’t automatically negate the beneficiary’s ability to sue the promisor or the new promisor depending on the new arrangement.