Jones v. Aetna Casualty & Surety Co. (1994) 26 Cal.App.4th 1717, explains that whether a third party is an intended beneficiary or merely an incidental beneficiary "involves construction of the parties' intent, gleaned from reading the contract as a whole in light of the circumstances under which it was entered." (Id. at p. 1725.)
In Jones, the landlord was obligated to maintain rental income insurance at the tenant's expense. When the property was damaged and the tenant could not pay rent, the landlord notified the insurance company, but the insurance company failed to pay.
The tenant then sued the insurance company for breach of the covenant of good faith and fair dealing, and claimed that he was being sued by the landlord because the insurance company breached its obligations. (Id. at p. 1721.)
The court held the tenant could not enforce the contract that was intended to benefit only the landlord because the tenant was never an intended beneficiary of the contract. (Id. at p. 1725.)
The court clarified that even though the tenant "would have received some benefit in the event the insurance company indemnified the landlord for loss of rental income only makes him an incidental beneficiary under the policy." (Ibid.)