Incidental Beneficiary

In one sentence

A third party who benefits from a contract by accident, not by the parties' intent.

Plain English

An incidental beneficiary is someone who benefits from a contract even though neither party intended to benefit them. For example, if a city contracts to repave a street, nearby shopkeepers might benefit from increased foot traffic, but they're incidental beneficiaries. The key point is that incidental beneficiaries cannot enforce the contract—only the parties who made it can.

Example

A town contracts with a construction company to build a new park. Local restaurants nearby will likely benefit from increased customers, but they are incidental beneficiaries and cannot sue if the park is never built.

Used in a sentence

“The neighboring property owner was merely an incidental beneficiary of the development contract and had no right to enforce it.”

Related terms

Intended Beneficiary

A person who is not a party to a contract but has the right to enforce it because the parties meant to benefit them.

Donee Beneficiary

A third party who receives the benefit of a contract as a gift.

Creditor Beneficiary

A third party who benefits from a contract because it pays off their debt.

Mutual Consent

Both parties freely agree to the same terms of a contract without pressure or misunderstanding.

Good Faith

An obligation to act honestly and fairly in performing or enforcing a contract.

Obligation

A legal duty that a party must perform under a contract or law.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.