Question

A-One Landscapers, Inc., owes Friendly Finance Company $5,000. A-One enters into a contract with Suburban Office Park under which A-One promises to maintain the landscaping on Suburban’s property. Under the contract, Suburban promises to pay Friendly Finance the amount that will be due A-One until A-One’s debt to Friendly Finance is paid. A-One performs as promised, but Suburban does not pay Friendly Finance. Can Friendly Finance succeed in a suit against Suburban? Why or why not?​

Answer 1

Answer: Yes they can.

Explanation:

Friendly Finance can sue Suburban as a Third Party beneficiary.

A Third Party beneficiary is one who is entitled to benefit from a contract made between two other parties.

A third party beneficiary has legal rights and can enforce their rights if certain clauses are met such as the existence of proof that they are indeed the intended beneficiaries.

In the above scenario, Suburban promises to pay Friendly Finance the amount that will be due A-One until A-One’s debt to Friendly Finance is paid and this was put into a contract. This proves that Friendly Finance is an INTENDED THIRD PARTY BENEFICIARY and seeing as A-One has performed as promised, Friendly Finance can take action against Suburban successfully.