KMART v. Balfour Beatty
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| KMART v. Balfour Beatty | |
| Court | US Virgin Islands |
|---|---|
| Citation | 994 F. Supp. 634 |
| Date decided | February 5, 1998 |
Facts
*Balfour Beatty, Inc. = shopping mall developer = construction company for commercial entities = defendant = "Balfour" = defendant
*Tutu Park Ltd. = "Tutu" = owner of the shopping mall
*KMART Corporation = "Kmart" = plaintiff = 3rd party in the contract between Tutu & Balfour
- In 1992, Balfour is contracted to build a shopping center in Saint Thomas, U.S. Virgin Islands.
- Kmart was going to be 1 of the tenants at the shopping mall.
- Kmart never directly contracted with Balfour.
- The contract was executed with Kmart in mind. The contract stipulated that Balfour's construction schedules comply with KMART’s requirements.
- In 1995, winds from Hurricane Maryland damaged the shopping center's roof.
Procedural History
Kmart sued Balfour for breach of contract & negligence in the District Court of the Virgin Islands.
Issues
Is a party an intended 3rd-party beneficiary to a contract if a promise appears to want to give the contract's benefit to the 3rd-party, & the contracting parties don't indicate otherwise?
Arguments
Balfour argued that Kmart was the 3rd-party beneficiary.
Holding
Yes. A party (Kmart) is an intended 3rd-party beneficiary to a contract if a promisee appears to want to give the contract's benefit to the 3rd party, & the contracting parties (Tutu & Balfour) don't indicate otherwise.
At the same time, Kmart is bound by the contract's arbitration clause.Judgment
Court proceeding stayed. Please head over to arbitration
Reasons
Judge Moore: Kmart wasn't an incidental beneficiary; Kmart was the intended beneficiary.
Rule
Section 302 of the 2nd Restatement of Contracts: 3rd-party intended beneficiary guidelines
