Third-Party Beneficiary

A third-party beneficiary is someone who benefits from a contract made between two other parties, even though they are not the original signers. For example, if a person contracts with a company to have a service provided to a friend, the friend is a third-party beneficiary. They have certain rights to enforce the contract if it’s not fulfilled as intended. Essentially, the original parties assume that the third party will benefit from the agreement, and depending on the circumstances, the third party may have legal standing to enforce or claim rights under that contract.