Sr. and Robson Jr. owned a company together.They entered into a contract to establish a retirement
payment schedule for Robson Sr., and to provide for Robson Jr.'s ownership
of the company after either party's death.
contract stipulated that if Robson Jr. died Robson Sr. would get the
entire company, but have to pay Robson Jr.'s wife $500 a month for 5
Jr. got divorced.The Robsons
drew a line through the provision about Robson Jr.'s wife and initialed
the contract.Then Robson Jr.
died. Robson Jr.'s wife sued for performance under the original terms of
Jr.'s wife was never an actual party to the contract.However, as a third-party
beneficiary of the terms of the
contract, she has standing to sue.
donee beneficiary of a contract
is a third party to whom the promised beneficial performance comes
without cost as a donation or gift.
Trial Court found for Robson Sr. The ex-wife appealed.
Trial Court found that the Robsons had a right to rescind the provision in
the contract that gave money to a donee beneficiary.
rights of a donee beneficiary are
more akin to the law of gifts than to the law of contracts.
Court found that Robson Jr.'s wife had not acted in her detriment
in reliance of the contract.If she had done so, she might
Robson Jr.'s wife had relied on
the contract, it would be said that she was vested in the contract.
Restatement of Contract §311
Appellate Court affirmed, but did not publish their opinion.