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The Importance of Third-party Beneficiary Clauses in Contracts

For anyone building a dream vacation home, renovating an existing commercial structure, or developing a multimillion-dollar, mixed-use project, construction contract terms are of utmost importance. One often overlooked clause covers the contractual “third-party beneficiary” (TBP)—a person or entity who, though not a party to the contract, stands to benefit from the contract’s performance. Interpretations of the TBP clause vary widely from state to state, and in my latest column for the Daily Journal of Commerce, I look at some of the nuances of the clause as it appears in construction contracts and how the clause is interpreted in Oregon, Washington and Utah. You can read the full column here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on September 15, 2022.

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