Question

Ferris owns an apartment in an apartment complex. The apartment-complex rules require the owner of each apartment to maintain it in reasonable condition. Failure to do so is grounds for action against the owner by the apartment complex or a tenant. Erica rents Ferris's apartment. During her first year of renting, many appliances in the apartment break, and there are repeated incidents of leaking through the roof. Ferris does nothing to fix the apartment. Erica sues Ferris, who claims he has no contractual duty to Erica. A court will likely find that:_____________.
a. Erica is a donee beneficiary, so Ferris does have a contractual obligation to her.
b. Erica is a contractual beneficiary, so Ferris does have a contractual obligation to her.
c. Erica is an incidental beneficiary, so Ferris does have a contractual obligation to her.
d. Erica is a creditor beneficiary, so Ferris does have a contractual obligation to her.

Answer 1

Answer:

Correct option is (d)

Explanation:

Creditor beneficiary is a party who is entitled to enjoy the benefits of the contract that has been put in place. They are not actively involved in the contract but are entitled to receive the benefit of contract executed by the promisor.

In this case, Erica is a third party creditor beneficiary for whom Ferris is legally obligated to perform his duties as the rules require owner to maintain the apartment which Ferris failed to oblige. So, Ferris breached contractual obligation to her.