Donee Beneficiaries—Deckler v. Fowler

A and B contract, A promising B to render at a future date some performance to C. What are the legal relations between A and C? B and C? A hundred years ago the answers to these questions would have required consideration of something called privity of contract and might well have been no legal relations . Today, however, we can, on the basis of many decisions, say with certainty that in most states A owes a contract duty to C on breach of which C may have the usual remedies of a contract obligee. In now accepted terminology C is a beneficiary of the A-B contract. The legal relations between B and C will vary according to B\u27s purpose in procuring A\u27s promise. If his purpose was to confer upon C a gratuity, C will be described as a donee beneficiary and B is a donor of the right which C acquires against A. If B\u27s purpose was to have rendered to C a performance which will discharge a duty owed by B to C, although in a sense the recipient of a gratuity, C is usually referred to as a creditor beneficiary and for some purposes the previously existing debtor-creditor relationship between B and C is changed to one of surety-creditor, A being regarded as now the principal debtor. The following discussion will be limited to donee beneficiaries