Which type of third-party beneficiary cannot sue to enforce the contract?

Study for the CLEP Business Law Test. Engage with flashcards and multiple choice questions, each question has hints and explanations. Prepare effectively for your exam!

An incidental beneficiary cannot sue to enforce the contract because their benefit is not a primary purpose of the agreement between the contracting parties. In legal terms, an incidental beneficiary is someone who may gain a benefit from the execution of a contract but was not intended to benefit from the contract by the parties involved. The primary purpose of the contract does not include providing a benefit to the incidental beneficiary; hence, they lack the standing needed to enforce the contractual terms.

In contrast, donee and creditor beneficiaries are intended beneficiaries. A donee beneficiary is someone who stands to benefit from a contract where one party intends to confer a gift, while a creditor beneficiary is one who benefits because the promisee owes them a duty or payment that the contract fulfills. Both donee and creditor beneficiaries have legal rights to enforce the contract because they are recognized as parties intended to receive benefits from the agreement.

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