Which statement about the promisor's liability to an intended TPB is correct?

Which statement about the promisor's liability to an intended TPB is correct?

• A. The TPB can sue the Promisee for breach
• B. The TPB has no rights against the Promisor
• C. The Promisor is liable to the Intended TPB; but the TPB cannot sue if promisee breaches
• D. The Promisor is not liable at all to the TPB

Answer: (C)

When a contract is formed for the benefit of an intended third-party beneficiary, that beneficiary gains the right to enforce the contract directly against the promisor. The promisor has a duty to perform to the intended TPB, so the promisor is liable to the intended TPB for breach. The third party is not in privity with the promisee, so their remedy is not against the promisee; instead, the remedy runs to the promisor. Therefore, the best statement is that the promisor is liable to the intended TPB, and the TPB cannot sue the promisee for breach—any action by the TPB would be to enforce the promise against the promisor.

When a contract is formed for the benefit of an intended third-party beneficiary, that beneficiary gains the right to enforce the contract directly against the promisor. The promisor has a duty to perform to the intended TPB, so the promisor is liable to the intended TPB for breach. The third party is not in privity with the promisee, so their remedy is not against the promisee; instead, the remedy runs to the promisor. Therefore, the best statement is that the promisor is liable to the intended TPB, and the TPB cannot sue the promisee for breach—any action by the TPB would be to enforce the promise against the promisor.