Incidental Beneficiary Law and Legal Definition
An incidental beneficiary is someone who indirectly obtains a benefit as the result of the main purpose of the trust. An incidental beneficiary is a beneficiary who is not an intended beneficiary. For example, a grandchild might benefit from his/her parent receiving a gift which could be used by the entire family, or which he/she may inherit from the parent.
In the context of contract law, there are two categories of third party beneficiaries; intended beneficiaries or incidental beneficiaries. An intended beneficiary may bring an action for breach of a third party beneficiary contract.
In order to bring an action for breach of a third party beneficiary contract the third party must establish;
- a contract between A and B;
- the “clear” or “manifest” intent of A and B that the contract primarily and directly benefit the third party (or class of persons to which that party belongs);
- breach of the contract by either A or B; and,
- damages to the third-party resulting from the breach. An incidental beneficiary has no enforceable rights under a contract.
