This hypothetical is based on a real suit between sports fans from the Universit

Question

This hypothetical is based on a real suit between sports fans from the University of Wisconsin and the University of California at Los Angeles (UCLA). Assume you represent UCLA. This year's UCLA Bruins football team is on the verge of winning the PAC10 title, which will guarantee the team a trip to the Rose Bowl, one of the most prestigious of postseason contests. By coincidence, representatives of the PAC10 are renegotiating a contract with the Big Ten, the other conference that sends a team to the Rose Bowl. The existing contract requires the school that represents the PAC10 in the game to supply to that year's Big Ten school 4,000 tickets to the game, for use by fans, alumni, and so on. Demand for this year's tickets is already huge. UCLA is not sure it can supply the 4,000 tickets and does not want to be sued by disappointed Wisconsin fans. The danger is that Badger supporters might book trips to California relying on the guaranteed 4,000 tickets, discover that they have no game tickets, and sue UCLA as third party beneficiaries. UCLA has spoken to the PAC10 representative about a change in the contract, but she insists that it is only fair for the PAC10 to do its best to supply the 4,000 tickets to the Big Ten. Think about how you could draft a proposed contract clause that obligates the PAC10-school to supply tickets to the Big Ten school but makes it clear that the contract is not intended to benefit anyone other than the two schools. In other words, the contract should prevent third party beneficiary claims.

Explanation / Answer

Third party beneficiary is referred as a person who may have the right to sue on a contract although in actual he/ she is not an active party of the contract. This situation arises when the third party is an intended beneficiary of the contract. The right of third party to sue the promisor or promise is known as us quaesitum tertio.

Being the representation of UCLA, one could draft a proposed contract clause that obligates the PAC10-school to supply tickets to the Big Ten school and make it clear that the contract is not intended to benefit anyone other than the two schools by adding the “no third-party beneficiary clauses.”

The clause can be drafted in this way, “this agreement is solely made for the benefit of the Big ten school and UCLA, and no other person shall have any right, benefit or interest under or because of this Agreement, except as otherwise specified herewith.”

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