What is the test for enforcement of a contract where the contract was signed expressly for the benefit of a third party?

California, United States of America


The following excerpt is from Goonewardene v. ADP, LLC, 209 Cal.Rptr.3d 722, 5 Cal.App.5th 154 (Cal. App. 2016):

Civil Code section 1559 provides: A contract, made expressly for the benefit of a third person, may be enforced by him [or her] at any time before the parties thereto rescind it. Here, [e]xpressly, ... means in an express manner; in direct or unmistakable terms; explicitly; definitely; directly. [Citations.] [A]n intent to make the obligation inure to the benefit of the third party must have been clearly manifested by the contracting parties. ' [Citation.] (Schauer v. Mandarin Gems of Cal. (2005) 125 Cal.App.4th 949, 957958, 23 Cal.Rptr.3d 233.) For that reason, the statute excludes enforcement of a contract by persons who are only incidentally or remotely benefited by it. [Citations.] (California Emergency Physicians Medical Group v. PacifiCare of California (2003) 111 Cal.App.4th 1127, 1137, 4 Cal.Rptr.3d 583 (California Emergency Physicians Medical Group ).)

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