Case Problem Analysis: Third

Party Beneficiaries

Ava Flavell and other owners $($Flavell$)$ contracted with

F$.$E$.$B$.$ General Contractors, Inc. $($FEB$)$ to conduct

renovations on their historic residence. FEB

subcontracted with Maxim Jakes Home Remodeling and

Repair $($Jakes$)$ to perform the roofing work on the

project. Jakes in turn subcontracted with Cal Bruce

Home Improvements $($Bruce$),$ to conduct the roofing

work on Jakes's behalf. When Bruce performed work on

the roof, he "botched the job" and caused extensive

leaking inside the house.

FEB and Jakes attempted to correct the problems, but

eventually abandoned the project, leaving Flavell to hire

others to complete the renovations. Flavell sued FEB,

Jakes, and Bruce for breach of contract. Jakes sought to

dismiss Flavell's claim against it$,$ arguing no privity of

contract existed between themselves and Flavell, and

therefore Jakes should not be liable for any damages.

Apply It: Third Party

Beneficiaries

Total points: $--/5$

Attempts left: $2$

Identifying the Facts and Issues

The principle that one who is not a direct party to a

particular contract normally does not have rights under

that contract is known as

privity of contract $*$

which FEB

have with Flavell

and which Jakes

does not

have with

Flavell.

An exception to the doctrine of privity of contract arises

when a contract is intended to benefit a

party. A third party that is