Explain the various types of third-party beneficiary contracts
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The various types of third-party beneficiary contracts include:
a. Intended beneficiary contract: Two parties to a contract (promisor and promisee), either by words, writing, or actions, intend to bring benefits to a third party by virtue of an enforceable contract.
b. Incidental beneficiary contract: There is no intent to bring benefits to the third party. The benefit is unintentional and the incidental beneficiary cannot sue to enforce such a contract.
c. Donee-beneficiary contract: It exists when the purpose of the promisee in obtaining a promise from the promisor is to make a gift to a third person.
d. Creditor-beneficiary contract: It exists when the purpose of the promisee in requiring a promisor's performance to be made to a third person is to fulfill a legal obligation of the promisee to the third person.
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