Third-Party Beneficiary Legislation

Third-party beneficiary legislation allows a person or group, who is not directly involved in a contract, to benefit from that contract. Essentially, if two parties (the contract's creators) agree to include another party (the beneficiary) in their arrangement, the beneficiary can enforce rights under that contract. This concept often applies in situations like insurance policies or trust agreements, where the beneficiary is intended to gain certain advantages or protections despite not being one of the original contracting parties. These laws help clarify the rights and obligations of all parties involved.