Legal Definitions - incidental beneficiary

Incidental beneficiary

An incidental beneficiary is someone who benefits from a contract between two other parties, but they are not intended to benefit. Therefore, they do not have any legal rights under the contract.

Let's say that John hires a contractor to build a house. The contract is between John and the contractor, and it specifies that the contractor will use high-quality materials. John's friend, Sarah, visits the house after it's built and is impressed with the quality of the materials. Sarah is an incidental beneficiary because she benefited from the contract between John and the contractor, but she was not intended to benefit.

Another example is if a couple buys a life insurance policy. The policy is between the couple and the insurance company, and it specifies that the insurance company will pay out a certain amount of money if one of the couple dies. The couple's children are incidental beneficiaries because they benefit from the policy, but they were not intended to benefit.

These examples illustrate the definition of an incidental beneficiary because in both cases, the third party (Sarah and the couple's children) benefited from a contract between two other parties (John and the contractor, and the couple and the insurance company), but they were not intended to benefit. Therefore, they do not have any legal rights under the contract.