Third Party Beneficiary Contract In Texas
A third party may recover on a contract made between other parties only if the parties intended to secure some benefit to that third party, and only if the contracting parties entered into the contract directly and primarily for the third party's benefit. See Thomson v. Espey Huston & Assoc., Inc., 899 S.W.2d 415, 418 (Tex. App.--Austin 1995, no writ).
In determining whether a third party can enforce a contract, the intention of the contracting parties is controlling. See MCI Telecommunications Corp. v. Texas Utils. Elec. Co., 995 S.W.2d 647, 651 (Tex. 1999) (citing Corpus Christi Bank & Trust v. Smith, 525 S.W.2d 501, 503-04 (Tex. 1975)).
A court will not create a third-party beneficiary contract by implication. See M.J.R. Corp. v. B&B Vending Co., 760 S.W.2d 4, 11 (Tex. App.--Dallas 1988, writ denied).
The intention to confer a direct benefit to a third party must be fully and clearly spelled out or enforcement by the third party must be denied. See id.
Consequently, a presumption exists that parties contracted for themselves unless it "clearly appears" that they intended a third party to benefit from the contract. See Smith, 525 S.W.2d at 503-04.
Any doubts are resolved against the finding of a third-party beneficiary. See Thomson, 899 S.W.2d at 418 (citing Dorsett Bros. Concrete Supply, Inc. v. Safeco Title Ins. Co., 880 S.W.2d 417, 421 (Tex. App.--Houston [14th Dist.] 1993, writ denied)).
Only intended beneficiaries may recover on a contract. See Republic Nat'l Bank v. National Bankers Life Ins. Co., 427 S.W.2d 76, 80 (Tex. Civ. App.--Dallas 1968, writ ref'd n.r.e.).
Intended beneficiaries can be grouped into two classes: donee beneficiaries and creditor beneficiaries. See MCI Telecommunications Corp., 995 S.W.2d at 651; see also 4 Corbin on Contracts, 774 (1951); 1 Williston on Contracts, 356 (3d ed. 1959).
One is a donee beneficiary if the purpose of the promisee in obtaining the promise is to make a gift to the beneficiary, or to confer upon the beneficiary a right against the promisor to some performance.
See Brunswick Corp. v. Bush, 829 S.W.2d 352, 354 (Tex. App.--Fort Worth 1992, no writ); 1 Williston on Contracts, 356. If, on the other hand, the beneficiary receives the performance in satisfaction of a legal duty owed him by the promisee, he is a creditor beneficiary. See Bush, 829 S.W.2d at 354; 4 Corbin on Contracts, 774; 1 Williston on Contracts, 356.
If the benefits of a contract to a third party are merely incidental to the performance of the promise, and the third party is neither a donee nor a creditor beneficiary, then the third party is an incidental beneficiary. See Republic Nat'l Bank, 427 S.W.2d at 80; Restatement (Second) of Contracts, 302, 315 (1979).
Incidental beneficiaries acquire no rights against either the promisor or the promisee by virtue of a promise. See Republic Nat'l Bank, 427 S.W.2d at 80; Restatement (Second) of Contracts, 315.