Third party beneficiary: concept and some features of legal status Cover Image

Naudos gavėjas: samprata ir teisinio statuso ypatumai
Third party beneficiary: concept and some features of legal status

Author(s): Edita Borevičienė
Subject(s): Social Sciences
Published by: Mykolas Romeris University
Keywords: third party beneficiary; incidental beneficiary; designated beneficiary; implied beneficiary; contract in favor of the third party; confirmation; acceptance; stipulation

Summary/Abstract: The paper presents the concept of the third party beneficiary as a specific contractual party, as well as the discussion upon the legal status of the beneficiary. Depending upon the actual situation, the third party beneficiaries are divided into three categories: incidental beneficiary (a person, who gets benefit from the contract accidentally or favor has not been considered by the original parties of the contract during the formulation of the contract); express beneficiary (a person explicitly named as a beneficiary in the contract); implicit beneficiary (a person, who’s right to benefit can be derived from the true will of the original parties and the circumstances, though his right was not expressly worded in the contract). The mandatory requirements to the formulation of contractual clause in favor of the third party are also comprehensively described in the paper. The main instance for a valid stipulation is the identifiability. The beneficiary must be identified with sufficient certainty at the time of performance of the clause. This statement refers to the main European contract law documents: UNIDROIT principles of international commercial law and The Principles of European Contract Law. The meaning of the beneficiaries will upon the vesting of a contractual right is also discussed in this paper. The beneficiary right actually arises at the moment of either stipulation in his or her favor or only after he or she accepts the clause. It depends on the doctrine that applies in the jurisdiction. The most common “confirmation” doctrine as well as a more seldom “acceptance” doctrine are overviewed in the paper in order to give a full picture of the third party beneficiary position over jurisdictions of Europe.

  • Issue Year: 6/2014
  • Issue No: 1
  • Page Range: 156–176
  • Page Count: 21
  • Language: Lithuanian
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