Fata v. S. A. Healy Co

In Fata v. S. A. Healy Co., 289 NY 401, 46 NE2d 339 (1943), the Court upheld a third-party beneficiary claim in a case similar to this one, though the relevant statute in Fata was state, not federal. The plaintiff there sought enforcement of a contract by which his employer agreed to "comply with the Labor Law of the State of New York" and to pay "not less than the prevailing rate" of wages (289 NY at 405). The Court concluded that the plaintiff had a valid common-law contract claim, even though the Labor Law provision in issue had its own enforcement mechanism: "It cannot be doubted that provisions requiring the contractor to pay such wages are also inserted in the contract, whether voluntarily or under compulsion of the statute, for the benefit of the laborers" (id.). The Court held that "where a valid statute requires the insertion of provisions intended for the protection of laborers or other groups in contracts relating to matters which are subject to regulation by the State," a "contractual obligation is created which may be enforced by action brought by one of the group for whose benefit the provisions have been inserted" (id.)