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Two parties may enter into a contract to benefit a third party beneficiary who is then entitled to enforce contractual obligations without being a party to the contract and thus may sue the obligor for breach. To be valid, there need not be express language in the contract creating a direct obligation to the third party beneficiary. However, a contract can only result in an obligation to a third party if both parties to the contract intended to create a direct obligation from the promisor to the third party.
After "The Howdy Doody Show" went off the air, puppeteer Rufus Rose kept possession of the Howdy Doody puppet. After negotiating by letters, the television network paid for past storage and maintenance and Rose agreed to send the puppet to plaintiff Detroit Institute of Arts (“DIA”). Meanwhile, Rose let his friend Buffalo Bob keep the puppet for public appearances. Rose and Bob died without sending the puppet to plaintiff. Plaintiff sued defendants for ownership of the puppet.
Was the plaintiff entitled to the ownership of the puppet in question?
The court held that the letters between decedent puppeteer and the network created a binding contract. The evidence showed that the parties agreed that the puppet would be transferred to plaintiff, a third party beneficiary of the contract. Since a reasonable time for such performance had passed, plaintiff was entitled to the puppet. An enforceable bailment was created whereby Bob assumed the duty to turn over the puppet to plaintiff. Defendants' laches, statute of wills, and statute of frauds defenses were rejected.