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Mike buys for Sally, his girlfriend, a car before his trip overseas

Law Oct 06, 2020

Mike buys for Sally, his girlfriend, a car before his trip overseas. He buys the car at Ace Autos. Ace Autos is to deliver the car to Sally within seven days. Mike signs the contract and prepays. Mike then leaves the country for his trip. Ten days have gone by and the car has not been delivered. Sally is not able to get in touch with Mike, and she calls Ace Autos. They refuse to talk to her and claim that they have a contract with Mike.

Explain what legal rights, if any, Sally has as to this contract for the car. Discuss specific points of third party liability laws.

Expert Solution

The scenario you present is interesting because it presents an important nuance.

By "third party liability" I assume you mean what is commonly referred to as the rights which may belong to a "third party beneficiary" to a contract.

Generally a third party will have the right to enforce a contract against a non-performer, in which they are to obtain a benefit when they gave no consideration to the non-performer, when the contract is explicit that the contract is being made for the benefit of the third party as part of the consideration.

I think that your facts are slim on showing that Sally has a right to obtain the vehicle based on the contract presented. There is no explicit representation from Mike to Ace Autos that the car is being bought for the BENEFIT of Sally. Rather, the contract described makes the delivery to Sally a condition of the contract - you could easily substitute "deliver the car to my office address" and it would still be a location. There is no explicit statement that the car is being bought "for Sally."

Additional facts may indicate that Mike's intention were communicated to Ace Autos, but this may require the showing of parole evidence which may not be admissible.

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