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The ultimate test to be applied in determining whether a person has a right of action as a third party beneficiary is whether the intent of the parties to the contract was that the promisor should assume a direct obligation to the third party beneficiary and that intent is to be determined from the terms of the contract read in the light of the circumstances attending its making, including the motives and purposes of the parties. It is not in all instances necessary that there be express language in the contract creating a direct obligation to the claimed third party beneficiary. The only way a contract could create a direct obligation between a promisor and a third party beneficiary would have to be, because the parties to the contract so intended.
Joseph Grigerik brought an action against defendant contractors which alleged a breach of contract. Pursuant to the contract, Sharpe, et al., had agreed to perform professional engineering services. The second count of Grigerik’s complaint was based on the negligence of defendants in performing these professional services. The jury found for Grigerik on both counts, and the trial court rendered judgment for Grigerik on the verdict. The appellate court reversed the judgment of the trial court, ordered that judgment be rendered for Sharpe, et al., on the negligence count, and ordered a new trial on the breach of contract count.
Does the intent of both parties, rather than just one of the parties to a contract, determine whether a third party is to be afforded third party beneficiary status under a contract?
The court concluded that Conn. Gen. Stat. § 52-584a provided the statute of limitations applicable to Grigerik’s negligence claim and that the claim was timely brought. The court also held that Grigerik cannot prevail on his breach of contract claim. The jurors specifically found that Grigerik had not proven that he was an intended beneficiary of the contract between Lang and the defendants. Grigerik, therefore, did not establish that it was the intent of the parties that he be a third party beneficiary of the contract. Therefore, the court reversed the decision of the appellate court and remanded the case for further proceedings.