An intended beneficiary is a person or entity that benefits from a contract made between two other parties. This individual or organization has specific rights under the contract and can enforce those rights once they have vested. In legal terms, an intended beneficiary is also referred to as a direct beneficiary.
The concept of an intended beneficiary is commonly used in contract law. It applies in various legal contexts, including civil law, where contracts are formed for personal, business, or financial agreements. Individuals may encounter this term when dealing with contracts that involve promises made for the benefit of another party. Users can utilize legal templates from US Legal Forms to draft contracts that clearly define the rights of intended beneficiaries.
Here are a couple of examples of abatement:
Example 1: A life insurance policy names a specific individual as the beneficiary. If the policyholder passes away, the named beneficiary has the right to claim the insurance payout.
Example 2: A contractor agrees to build a house for a client, with a specific third-party company receiving payment for the materials. The third-party company is an intended beneficiary of the contract. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | Allows for broader definitions of intended beneficiaries in certain contracts. |
| New York | Requires clear intent from the promisor for the beneficiary to enforce rights. |
| Texas | Recognizes both intended and incidental beneficiaries, with different rights. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition |
|---|---|
| Incidental Beneficiary | A person who may benefit from a contract but does not have enforceable rights. |
| Creditor Beneficiary | A person who is intended to receive payment or benefit from a contract to satisfy a debt. |
If you believe you are an intended beneficiary of a contract, review the contract carefully to understand your rights. If necessary, consider consulting with a legal professional for advice tailored to your situation. Additionally, you can explore US Legal Forms for templates that may help you manage your rights effectively.
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An intended beneficiary has enforceable rights under a contract, while an incidental beneficiary does not.