Opinion ID: 1966165
Heading Depth: 2
Heading Rank: 1

Heading: Breach Of Contract Intended To Benefit The Plaintiffs

Text: The plaintiffs contend that they were the intended third-party beneficiaries of a contract between the Bank and Thiele whereby the Bank agreed to pay all of Thiele's overdrafts. [5] They further claim that they are entitled to damages for breach of that contract by the Bank. Section 9-02-04, N.D.C.C., provides:  Third-party beneficiary may enforce contract.  A contract made expressly for the benefit of a third person may be enforced by him at any time before the parties thereto rescind it. We have construed this statute to mean that a party only incidentally benefited by performance of a contract is not entitled to maintain an action to enforce it: Section 9-02-04, N.D.C.C., has been construed many times. In Parlin v. Hall, 2 N.D. 473, 52 N.W. 405, 407 (1892), this court said:  `.... The mere fact that one not a party to an agreement may be benefited by its performance does not bring him into contractual relations with the promisor in the agreement. He must have been the party intended to be benefited by the promise, and there must have existed at the time thereof such an obligation on the part of the promisor towards the third person as gives him at least an equitable right to the benefits of the promise....' This court said in Syllabus No. 4, Farmers' State Bank v. Anton, 51 N.D. 202, 199 N.W. 582 (1924):  `The mere fact that a third party may derive a benefit, purely incidental and not within the contemplation of the parties, from the performance of a contract, does not entitle him to maintain an action thereon in his own name within the provisions of section 5841, Comp.Laws 1913, giving the beneficiary the right to enforce a contract made expressly for his benefit.' First Federal Savings and Loan Association of Bismarck v. Compass Investments, Inc., 342 N.W.2d 214, 218 (N.D. 1983). The plaintiffs in this case do not allege any special circumstances which demonstrate that the Bank and Thiele expressly intended the contract to provide a benefit to them in more than an indirect manner. The plaintiffs claim that the mere fact that they were paid by checks which would have been returned for insufficient funds absent the agreement renders them the intended beneficiaries of the agreement. It is clear that the contract, if any, was for the primary benefit of the Bank and Thiele, and any benefit flowing to those third parties who were payees on Thiele's checks was purely incidental. We conclude that the trial court did not err in granting summary judgment on this issue.