Who can an obligee sue in a third-party beneficiary contract?

Who can an obligee sue in a third-party beneficiary contract?

• A. Delegating party
• B. Delegate who gets consideration
• C. Either the delegating party or the delegate who gets consideration
• D. Only the beneficiary

Answer: (C)

The key idea is how liability works when a duty is delegated. The party who owes the duty to the obligee remains liable for performance unless the delegate explicitly assumes the obligation by accepting the delegation with something given in return. If the delegate accepts and the obligee provides consideration to that delegate, a contract forms between the obligee and the delegate, giving the obligee a direct right to sue the delegate for nonperformance. Meanwhile, the delegating party can still be sued as the original promisor because liability doesn’t disappear unless there’s a novation or a clear release. So, the obligee can sue the delegating party for failure to perform, and if the delegate has accepted the delegation with consideration, the obligee can also sue the delegate who took on the obligation. If there’s no consideration transferred to the delegate, the obligee typically wouldn’t have a direct contract with the delegate, and suing the delegate wouldn’t be appropriate. This is why the correct outcome includes both the delegating party and the delegate who gets consideration.

The key idea is how liability works when a duty is delegated. The party who owes the duty to the obligee remains liable for performance unless the delegate explicitly assumes the obligation by accepting the delegation with something given in return. If the delegate accepts and the obligee provides consideration to that delegate, a contract forms between the obligee and the delegate, giving the obligee a direct right to sue the delegate for nonperformance. Meanwhile, the delegating party can still be sued as the original promisor because liability doesn’t disappear unless there’s a novation or a clear release.

So, the obligee can sue the delegating party for failure to perform, and if the delegate has accepted the delegation with consideration, the obligee can also sue the delegate who took on the obligation. If there’s no consideration transferred to the delegate, the obligee typically wouldn’t have a direct contract with the delegate, and suing the delegate wouldn’t be appropriate. This is why the correct outcome includes both the delegating party and the delegate who gets consideration.