Abraham Zion Corp. v. Lebow

In Abraham Zion Corp. v. Lebow, 761 F.2d 93 (2ndCir 1985), a clothing manufacturer sought to bar a designer from using the designer's own name on the labels of his designs. The manufacturer based its claim on the fact that it had contracted to use the name with other member's of the designer's family. The designer himself was not a party to the agreement between his family and the manufacturer. The manufacturer asserted however that the designer was a third-party beneficiary to the agreement so was bound by it. The Abraham court stated: "Plaintiff's contention that [Defendant] was a third-party beneficiary of that agreement, even if correct, would not advance their cause, since the question is not [Defendant's] right to enforce the agreement but rather the right of the plaintiffs to enforce the agreement (as they construe it) against [Defendant]." Id. at 103. In addition to the federal cases, the comment to 9-339 of the Uniform Commercial Code supports the premise that a person whose priority rights are subordinated must be a party to the agreement. The section states, "This article does not preclude subordination by agreement by a person entitled to priority." Id. The Comment to 9-339 emphasizes that "only the person entitled to priority may make [a subordination] agreement: a person's rights cannot be adversely affected by an agreement to which the person is not a party." Id.