What is the practical consequence of being an incidental beneficiary?

• A. Incidental beneficiaries generally cannot sue to enforce the contract.
• B. Incidental beneficiaries have no rights under the contract.
• C. Incidental beneficiaries can sue for specific performance.
• D. Incidental beneficiaries may enforce only if there is a separate agreement.

Answer: (A)

When a contract is made for the benefit of a third party, that party is either an intended beneficiary or an incidental beneficiary. Incidental beneficiaries do not have enforceable rights under the contract, so they lack standing to sue to enforce it. The contract creates rights and duties only between the promisor and the promisee (and, if the contract is breached, the intended beneficiary may sometimes sue, but an incidental one generally cannot). In short, the practical consequence is that incidental beneficiaries cannot sue to enforce the contract.