Editing Contracts/Third-party beneficiary
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A '''third-party beneficiary''', in the [[law]] of [[contract]]s, is a person who may have the right to sue on a contract, despite not having originally been an active [[party (law)|party]] to the contract. This right, known as a ''ius quaesitum tertio'',<ref>{{cite web|url=http://www.legal-glossary.org/jus-quaesitum-tertio/ |title=Legal Definition of ius quaesitum tertio |publisher=legal-glossary.org |date= |accessdate=2014-09-12}}</ref> arises when the third party (''[[tertius (law)|tertius]]'' or ''alteri'') is the <u>intended beneficiary</u> of the contract, as opposed to a mere incidental beneficiary (''penitus extraneus''). It [[vesting|vests]] when the third party relies on or assents to the relationship, and gives the third party the right to sue either the promisor (''promittens'', or performing party) or the promisee (''stipulans'', or anchor party) of the contract, depending on the circumstances under which the relationship was created. | A '''third-party beneficiary''', in the [[law]] of [[contract]]s, is a person who may have the right to sue on a contract, despite not having originally been an active [[party (law)|party]] to the contract. This right, known as a ''ius quaesitum tertio'',<ref>{{cite web|url=http://www.legal-glossary.org/jus-quaesitum-tertio/ |title=Legal Definition of ius quaesitum tertio |publisher=legal-glossary.org |date= |accessdate=2014-09-12}}</ref> arises when the third party (''[[tertius (law)|tertius]]'' or ''alteri'') is the <u>intended beneficiary</u> of the contract, as opposed to a mere incidental beneficiary (''penitus extraneus''). It [[vesting|vests]] when the third party relies on or assents to the relationship, and gives the third party the right to sue either the promisor (''promittens'', or performing party) or the promisee (''stipulans'', or anchor party) of the contract, depending on the circumstances under which the relationship was created. | ||
A contract made in favor of a third party is known as a "third-party beneficiary contract. | A contract made in favor of a third party is known as a "third-party beneficiary contract" or simply "third-party contract" (''stipulatio alteri'' or ''pactum in favorem tertii''), and any action to enforce a ''ius quaesitum tertio'' is known as a "third-party action". | ||
Under traditional [[common law]], the ''ius quaesitum tertio'' principle was not recognized, instead relying on the doctrine of [[privity of contract]], which restricts rights, obligations, and liabilities arising from a contract to the contracting parties (said to be ''privy'' to the contract). However, the [[Contracts (Rights of Third Parties) Act 1999]] introduced a number of allowances and exceptions for ''ius quaesitum tertio'' in [[English law]]. Other [[Common law|common-law]] countries are also making reforms in this area, though the [[United States of America|United States]] is unique in abandoning privity early in the mid-19th century. | Under traditional [[common law]], the ''ius quaesitum tertio'' principle was not recognized, instead relying on the doctrine of [[privity of contract]], which restricts rights, obligations, and liabilities arising from a contract to the contracting parties (said to be ''privy'' to the contract). However, the [[Contracts (Rights of Third Parties) Act 1999]] introduced a number of allowances and exceptions for ''ius quaesitum tertio'' in [[English law]]. Other [[Common law|common-law]] countries are also making reforms in this area, though the [[United States of America|United States]] is unique in abandoning privity early in the mid-19th century. | ||