Contract Interpretation: Bad Contract

Provisions in contracts, or full contracts, in which you give up a legal right to sue for harm that you have already suffered.

A release that attempts to extinguish claims for future conduct—i.e., for conduct that takes place after the release is signed.

Also known as a broad release.

• A narrower release than a general release b/c it only releases claims relating to a particular incident or incidents, not claims relating to any event since the beginning of time, as in the prior example.

• Courts are more likely to fully enforce limited releases than general releases.

A party who receives a benefit from the performance of a contract, but who was not intended by the parties to be a beneficiary.

When the parties to a contract intend that a third person receive a benefit from the performance of the contract.

• Intended Beneficiary: A party who receives a benefit from the performance of a contract, but who was not intended by the parties to be a beneficiary.

• Incidental Beneficiary: When the parties to a contract intend that a third person receive a benefit from the performance of the contract.

• Intended third-party beneficiaries may recover under a contract; intended beneficiaries may sue to enforce the agreement if the parties do not perform.

• Incidental third-party beneficiaries may not recover under a contract; incidental beneficiaries have no right to sue if the parties do not perform.