Cengage Advantage Books: Business Law 13th Edition by Roger LeRoy Miller

Exercise 14

Third Party Beneficiary Alexander has been accepted as a freshman at a college two hundred miles from his home for the fall semester. Alexander's wealthy uncle, Michael, decides to give Alexander a car for Christmas. In November, Michael makes a contract with Jackson Auto Sales to purchase a new car for $18,000 to be delivered to Alexander just before the Christmas holidays, in mid-December. The title to the car is to be in Alexander's name. Michael pays the full purchase price, calls Alexander and tells him about the gift, and takes off for a six-month vacation in Europe. Is Alexander an intended third party beneficiary of the contract between Michael and Jackson Auto Sales? Suppose that Jackson Auto Sales never delivers the car to Alexander. Does Alexander have the right to sue Jackson Auto Sales for breaching its contract with Michael? Explain.