THIRD-PARTY BENEFICIARY LAW
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 for the third party's benefit. Stine v. Stewart, 80 S.W.3d 586, 589 (Tex. 2002). The mere fact
that a person might receive an incidental benefit from a contract does not give
that person a right of action to enforce the contract. Id. In determining
whether a third party can enforce a contract, the intention of the contracting
parties is controlling. S. Tex. Water
Auth. v. Lomas, 223 S.W.3d 304, 306 (Tex.2007). The intention to confer a
direct benefit to a third party must be clearly and fully spelled out, or
enforcement by the third party must be denied. Id. Courts may not create
third-party beneficiary contracts by implication. Stine, 80 S.W.3d at 589. There is a presumption in Texas against
third-party beneficiary agreements. Tawes
v. Barnes, 340 S.W.3d 419, 425 (Tex.2011).
WHO QUALIFIES AS A THIRD-PARTY BENEFICIARY?
Texas recognizes two forms of third-party beneficiary: creditor and donee.
Texas recognizes two forms of third-party beneficiary: creditor and donee.
A party is a creditor beneficiary if no
intent to make a gift appears from the contract (which would make the party a
donee beneficiary), but performance will satisfy an actual or asserted duty of
the promisee to the beneficiary. Lomas,
223 S.W.3d at 306; Esquivel v. Murray
Guard, Inc., 992 S.W.2d 536, 543 (Tex.App.-Houston [14th Dist.] 1999, pet.
denied).[4] This duty may be an indebtedness, contractual obligation, or other
legally enforceable commitment to the third party. Esquivel, 992 S.W.2d at 544.
The promisee must intend that the beneficiary will have the right to enforce
the contract. Id.
SOURCE: HOUSTON COURT OF APPEALS - Nos.
14-10-00821-CV, 14-10-00856-CV, 14-10-01145-CV – 5/17/12 375 - Garcia v. Bank
of America Corporation, 375 S.W.3d 322 (2012)
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