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18. Which of the following statements is most accurate with respect to the breach of contract claim against the janitorial service?
A janitorial service contracted in writing with a hospital for a one-year term. Under the terms of the contract, the janitorial service agreed to clean the hospital daily in accordance with the hygiene standards of the city's health code. Because the janitorial service did not clean a patient's room in accordance with the required hygiene standards, the patient contracted an infection that required continued hospitalization. In addition to suing the hospital, the patient sued the janitorial service for breach of contract.
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Incidental third-party beneficiaries are those who may benefit from the contract, but that is not the primary purpose of the contract. These incidental beneficiaries have no contract rights.
Whether a beneficiary is «intended» is determined by examining several factors, including whether: (i) the beneficiary could have reasonably relied on the fact that a purpose of the contract was to confer a right to him; (ii) performance is supposed to run directly from a contracting party to the third party, rather than from the promisor to the promissee and only indirectly benefitting the third party; (iii) again, if part of the overall objective of the parties to the contract was to benefit the third party.
C is correct. The patient cannot recover from the janitorial service because she was an incidental beneficiary rather than an intended third-party beneficiary. The contract between the janitorial service and the hospital would have had the effect of benefitting the patient, but the patient was not intended to be a beneficiary. No facts indicate that the patient could have reasonably relied on any promise under the contract to confer a right to her, or that the contract intended performance to run directly to the patient, or that the overall objective of the parties was specifically to benefit the patient. Rather, any benefit to the patient would have been incidental.
A is incorrect. A violation of public policy typically has the effect of rendering a contract unenforceable. Here, the patient's inability to recover against the janitorial service will be governed by a third-party beneficiary theory, under which she would be an incidental beneficiary and therefore not eligible to recover damages.
B is incorrect. The patient is not an intended, but an incidental third-party beneficiary. As explained above, none of the factors supporting a finding of intent are present here. The patient was not expressly designated in the contract, the contract did not make performance directly to her, she does not have any rights under the contract, and she does not have such a close relationship with the promisee that a court could infer the promisee wished to make an agreement for the third party's benefit.
D is incorrect. It is not required that an intended third-party beneficiary be explicitly named in the contract. The analysis relies on whether the factors indicating intent are present in the original contract. Nevertheless, the patient here will not recover against the janitorial service because she was merely an incidental beneficiary rather than a third-party beneficiary, as explained above.