Question

The rights of a third-party beneficiary vest when he:

A Signs the contract; makes an enforceable promise in the contract; or provides consideration for the promise in the contract

B Is named in the contract; is identifiable by the terms of the contract; or is identifiable at the time of performance

C Receives notice of the existence of the contract; is a creditor of the promisee; or is an intended, not incidental, beneficiary

D Manifests assent to the promise; brings suit to enforce the promise; or materially changes position in justifiable reliance on the promise

Answer 1

Third-party beneficiary rights vest when the beneficiary manifests assent to the promise, brings suit to enforce the promise, or materially changes their position in reliance on the promise. These rights are based on property rights, allowing agreements for secure transactions.

Step-by-step explanation:

The rights of a third-party beneficiary vest, meaning they become legally enforceable, when certain conditions are met. These rights do not generally arise simply by being named in a contract or being a party to it, as the third-party beneficiary is not one of the contracting parties. Instead, rights typically vest in a third-party beneficiary under the following circumstances:

1. The third-party beneficiary manifests assent to the promise made in the contract that benefits them.
2. The third-party beneficiary brings suit to enforce the promise.
3. The third-party beneficiary materially changes their position in justifiable reliance on the promise.

It is essential to recognize that contractual rights are fundamentally based on property rights. This property involves not only physical objects but also the intangible right to enter into agreements over the use of one's property and services. Enforcement of contracts is critical for allowing businesses and individuals to securely engage in transactions and uphold their economic interests.