In re Marriage of Smith & Maescher

Brief Fact Summary.

Smith sued Maescher for breach of a separation agreement that required Maescher to pay child support for their two kids along with four years of college tuition.

Synopsis of Rule of Law.

A party may obtain specific performance of an agreement that was designed to benefit a third party.

Facts.

Maescher and Smith separated in 1976 and Maescher agreed to pay child support for both children until they were 18 years of age and their college tuition. Maescher paid Peter’s, the oldest child’s, tuition for the first three years, and refused to pay for the fourth year unless Peter maintained a B average. Smith ended up paying $11,000 for Peter’s tuition in his fourth year of college, and Maescher gifted Peter $10,000 at the end of the final year, advising him to repay Smith for paying his last year’s tuition. Smith did not accept the $10,000 and sued Maescher for breach of contract. The trial court granted judgment to Smith and Maescher appealed.

Issue.

Whether a party may obtain specific performance of an agreement that was designed to benefit a third party?

Held.

Yes. The judgment of the trial court is reversed. Peter was a donee beneficiary because Smith was not required to pay Peter’s tuition. Smith therefore was not entitle to money damages for breach of contract.

Discussion.

Although a third party can seek enforcement of a contract benefitting the third party, another contracting party may still seek specific performance of the contract. The promisee will not be able to receive money damages for breach of contract, however, if the third party is a donee beneficiary.