Contracts & ExecutionQuestion 874 of 1605
An 'incidental beneficiary' of a contract differs from an intended beneficiary in that an incidental beneficiary:
a.Is always the property owner
b.Benefits only indirectly and generally has no right to enforce the contract
c.Has full rights to sue on the contract
d.Must approve every change order
Explanation
An incidental beneficiary receives some indirect or unintended benefit from a contract but was not a party the contracting parties intended to benefit; as a result, an incidental beneficiary generally has no legal right to enforce the contract. For example, a nearby merchant who might get more foot traffic from a new building is only incidentally benefited. This contrasts with intended beneficiaries, who can sue; incidental beneficiaries have no such enforcement rights.
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Related questions on this topic
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)