Basic Capital Management v. Dynex Commercial

In Basic Capital Management v. Dynex Commercial, 348 S.W.3d 894 (Tex. 2011), the high court quoted various principles of third-party-beneficiary law from the MCI opinion. The Basic Capital court then noted that the construction of an unambiguous instrument is a question of law for the court. See id. at 900. The court did not state that the determination of the third-party-beneficiary issue is a question of law for the court. See id. at 899-901. The court then analyzed the contract in question and concluded that, if the parties did not intend to benefit the third parties directly, then the contract had no purpose whatsoever. See id. at 900. The court noted that the contract did not contain an express statement of an intention to benefit the third parties. See id. Nonetheless, the court concluded that the contract "'clearly and fully spelled out' the benefit to the third parties because their role was basic to the contract." Id. at 901. The Basic Capital court held that there was no need to obtain a jury finding as to the third-party-beneficiary issue because the contract was unambiguous and because "the contract itself, and the undisputed evidence regarding its negotiation and purpose, establish that the third parties were third-party beneficiaries." Id. at 901. In determining that two plaintiffs were third-party beneficiaries entitled to recover under an unambiguous loan-commitment contract, the Basic Capital court did not limit its review to the four corners of the unambiguous contract; rather, the court considered evidence regarding the negotiation and purpose of the contract. See id.