The Edmond Sun

Features

December 20, 2013

What is a third party beneficiary?

EDMOND — EDITOR’S NOTE: This is a weekly series       of columns written by attorneys at Lester,           Loving & Davies law firm in Edmond.

A third party beneficiary is a person who receives some benefit of a contract to which he is not a party. If two people enter into a contract together, but the contract actually benefits another person, that third person is the third party beneficiary. If one of the parties to the contract refuses to perform, the third party beneficiary may be able to enforce the deal in court, despite the fact that she is not a party to the contract.

Consider an example. Let’s assume for a moment that my daughter’s letter to Santa Claus somehow — perhaps through the magic of Christmas — rises to the level of a contract. Now, technically, her letter to The Man is not a contract. She has simply made an offer that goes something like this: “bring me some stuff.” Even if Santa performs by bringing each item she requested, no contract arises because she has not offered to give up anything that might be of value to a big elf.

But let’s pretend that her letter to Santa, once mailed via the shelf elf, becomes a binding contractual offer that she cannot revise. In that case, she cannot legally change her mind at the last minute. She can’t decide on Christmas Eve to remove an item, say a basketball, and replace it with a doll that went out of production in 1997.

Is there a third party beneficiary to my child’s “binding” letter to Santa? Why, yes. Yes there is. There is a middle-aged elf who counted on my daughter’s “contractual offer” to The Big Man. He already made the stuff she asked for. He carefully packed it in the sleigh. While he doesn’t wish to disappoint the child, he also doesn’t want to get out of his elfjamas and trudge back to Santa’s workshop, praying for the supplies necessary to make the new request appear.

The beauty of dealing with an 8-year-old girl is that the child has not been to law school. She’s just a beggar armed with a crayon and a homemade postage stamp. In emergencies such as these, the legal definition of third party beneficiary can be changed to make an otherwise unenforceable letter as if written in stone. In this instance, claiming third party beneficiary status on behalf of the tired elf, though fraudulent, is your legal right. Ho, ho, ho, ho.

MATT HOPKINS is an attorney for Lester, Loving & Davies P.C. More information is available at lldlaw.com. Send questions to questions@lldlaw.com.

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