Breach of Third-party Beneficiary Contract

From Florida Legal Wiki

A person who is not a party to a contract may not sue for breach of that contract where that person receives only an incidental or consequential benefit from the contract. Metropolitan Life Ins. Co. v. McCarson, 467 So.2d 277 (Fla.1985). The exception to this rule is where the entity that is not a party to the contract is an intended Third-party Beneficiary of the contract. Jacobson v. Heritage Quality Constr. Co., 604 So.2d 17 (Fla. 4th DCA 1992), dismissed, 613 So.2d 5 (Fla.1993). A party is an intended beneficiary only if the parties to the contract clearly express, or the contract itself expresses, an intent to primarily and directly benefit the third party or a class of persons to which that party claims to belong. Aetna Casualty & Surety Co. v. Jelac Corp., 505 So.2d 37 (Fla. 4th DCA 1987); Warren; Security Mut. Casualty Ins. Co. v. Pacura, 402 So.2d 1266 (Fla. 3d DCA 1981).

Thus, in order to plead a cause of action for breach of a third party beneficiary contract, the following elements must be set forth:

(1) a contract between A and B;

(2) an intent, either expressed by the parties, or in the provisions of the contract, that the contract primarily and directly benefit C, the third party (or a class of persons to which that party belongs);

(3) breach of that contract by either A or B (or both); and

(4) damages to C resulting from the breach.

Additionally, in order to find the requisite intent, it must be shown that both contracting parties intended to benefit the third party. It is insufficient to show that only one party unilaterally intended to benefit the third party. See Clark and Co. v. Department of Ins., 436 So.2d 1013, 1016 (Fla. 1st DCA 1983). Based upon the foregoing, the initial issue presented is whether, taking the well-pleaded allegations as true and viewing them in the light most favorable to Caretta, the allegations of Count III sufficiently pleads all of these elements.

Caretta Trucking, Inc. v. Cheoy Lee Shipyards, Ltd., 647 So.2d 1028 (Fla. 4th DCA 1994)