Vesting of Rights
Once the beneficiary's rights have vested, the original parties to the contract are both bound to perform the contract. Any effort by the promisor or the promisee to rescind or modify the contract at that point are void. Indeed, if the promisee changed his mind and offered to pay the promisor money not to perform, the third party could sue the promisee for tortious interference with the third party's contract rights.
There are three tests used to determine whether the third party beneficiary's rights have vested:
- if the beneficiary knows of and has detrimentally relied on the rights created;
- if the beneficiary expressly assented to the contract at the request of one of the parties; or
- if the beneficiary files a lawsuit to enforce the contract
Read more about this topic: Third-party Beneficiary
Famous quotes containing the word rights:
“A state that denies its citizens their basic rights becomes a danger to its neighbors as well: internal arbitrary rule will be reflected in arbitrary external relations. The suppression of public opinion, the abolition of public competition for power and its public exercise opens the way for the state power to arm itself in any way it sees fit.... A state that does not hesitate to lie to its own people will not hesitate to lie to other states.”
—Václav Havel (b. 1936)