Brief Fact Summary.
Masad sued the state of South Dakota when he was injured in the course of employment for a company that contracted with a State prison.
Synopsis of Rule of Law.
As a third-party beneficiary, a non-party to a contract can enforce the contract if the contract was made to benefit the non-party.
Masad was an employee of Catering by Marlins, Inc. (CBM) who contracted with the South Dakota Department of Corrections to provide food services to a State prison. Masad was injured by an inmate while working for CBM, and Masad sued the state of South Dakota for breach of contract. The trial court granted summary judgment to the State and Masad appealed.
Whether a non-party to a contract can enforce the contract if the contract was made to benefit the non-party?
Yes. The trial court’s judgment is affirmed. Masad cannot enforce the contract as a third-party beneficiary because the agreement between CBM and the State was not made to expressly benefit CBM employees; the contract was primarily made for CBM to provide food services to the State.
And, even then, not all beneficiaries qualify: incidental beneficiaries are not entitled to third-party beneficiary status.View Full Point of Law
Although several people may receive benefits from a contract, only the people who the contract was expressly made to benefit may enforce the contract. In order for a third party beneficiary to enforce a contract, the third party must show that the contract was entered into for the third party’s benefit.