Contract for the Benefit of Third Parties

Edita Borevičienė

Abstract


The article is focused on the analysis of the third party contracts as a separate institute of Contract Law, including the introductory remarks to economical assumptions and genesis of the contract. The development of a third party contract, as a separate type of contract is a, result of the emergence and development of socio-economic relations, mostly—expansion of insurance business, in particular, the need to validate the beneficiary’s legal status. In order to recognize the rights of third parties the theory had to overcome the traditional doctrine on privacy of contract. The ability to acknowledge the third party’s rights is based on the fundamental principles of contract law—consensualism and freedom of rights. The article presents a concept of the specific status of the third party. The author takes the view that the third party (the beneficiary) is an independent contractor who has specific duties and obligations as well as rights and benefits. This argument is based on the modern theory of interdependence of legal rights and obligations. This approach is based by an argument— that no one can obtain any write without undertaking the obligation to legalize it. From the standpoint of the transaction dynamics the independent contractor, the third party enters the contract by expressing its will to accept the benefit stipulated in its favor. The idea is elaborated by analysis of the classical carriage and insurance contracts. These practical examples illustrate the internal legal relations of the contractual parties ant special undertakings that the third party is bound to undertake if it is willing to take the benefit of it. Furthermore, German doctrine of “Contract with protective effects towards third parties” has also been shortly overviewed in order to give a relevant comprehensive view on the analyzed question.

Keywords


contract in favor of the third party; third party; beneficiary

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"Societal studies" ISSN online 2029-2244 / ISSN print 2029-2236