Question 1

What contract rights do third-party beneficiaries have in Florida?

Accepted Answer

FL rights: an intended third-party beneficiary can: sue the promisor directly for breach of contract, recover the same damages as the promisee (compensatory damages, consequential damages, and specific performance), and enforce any contractual provisions that were intended for their benefit. The beneficiary: cannot enforce provisions that were not intended for their benefit. The promisor: can raise defenses that would have been available against the promisee (failure of consideration, illegality, and statute of limitations). The promisee: can also sue the promisor for breach (the beneficiary’s rights do not eliminate the promisee’s rights).

Question 2

How do Florida courts determine third-party beneficiary intent?

Accepted Answer

Intent: the courts examine: the contract language (the most important factor: does the contract express an intent to benefit the third party?), the surrounding circumstances (the purpose of the contract and the relationship between the parties), and whether the third party was identified (by name or by description of a class). The test: the contract must clearly express an intent to primarily and directly benefit the third party (not merely incidentally). A general benefit: to the public or to a class of persons is not sufficient. The third party: must be identifiable at the time the contract is made (or at the time of performance).

Question 3

What are examples of third-party beneficiary contracts in Florida?

Accepted Answer

Examples: construction payment bonds (Section 255.05: public construction; subcontractors are intended beneficiaries of the payment bond), insurance contracts (the beneficiary of a life insurance policy; the injured party in a liability insurance policy), mortgage assumption (the lender is a third-party beneficiary when the buyer assumes the seller’s mortgage), employee benefit plans (employees are intended beneficiaries of the employer’s benefit contracts with insurance companies), and real estate contracts (a buyer’s lender may be a third-party beneficiary of certain closing provisions).

Third Party Beneficiary Contract Rights

Third-Party Beneficiary Contract Rights in Florida

Rights

Intent Test

FL Examples

Related Terms

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