I am wondering about the legal terminologies that define a relationship that I have with a service company. Some maintenance work was needed for several appliances at my home, so I contacted my warranty company. My home warranty company dispatched a technician from a service company to take care of it. I paid my warranty company a service fee, which I think of as a deductible in an insurance policy.

Since I didn't pay the service company directly, legally am I still a client of the service company? I was told by them that I do not have a client relationship with them as the warranty company was the client in this transaction. Is that correct? I am curious what legal terms/concepts are applicable in this situation and if I have a legal relationship with a service company which provides service on properties I own but is not paid by me.



The contractual chain is you <-> warranty company <-> (potentially others you don’t know about) <-> service provider.

Should something go wrong, you would sue your warranty company who might (it is up to them) then sue the service provider. Notwithstanding, it’s likely the service company owes you a duty of care and would be directly liable to you for a negligence claim.

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I wrote this answer before the OP added the U.S. tag. Thus this answer doesn't apply any more.

I'll dilate on Dale M's comment that's alluding to the Contracts (Rights of Third Parties) Act 1999. I'll quote England textbooks that present it better than I can.

Richard and Damian Taylor. Contract Law Directions (2019 7 ed). p 82.

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Poole, Shaw-Mellors. Contract Law Concentrate (4 ed 2019). p 82.

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  • Sorry, added the "United States" tag. – Eddie Kal Feb 10 at 12:58

What is my relationship with a service company contracted by my insurance company?

You are the obligee or beneficiary, where as the service company is the obligor.

You have a contract only with the warranty company (to which you interchangeably refer as insurance company), whereas the service company has a contract only with the warranty company. Those are the legal relationships that exist in the scenario you outline.

That being said, a beneficiary may take legal action against the obligor if something goes wrong, regardless of the fact that the obligor entered its contract with an entity other than the beneficiary.

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  • 1
    What makes the service company an obligor to the end user? They are hired to perform some action by the warranty company. I have not heard of this relationship before and am curious. – George White Sep 19 '19 at 0:13
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    Third parties, even if they benefit, generally have no right to sue under contract (suits under tort or equity are ok). This is the doctrine of privity. The UK has passed legislation to allow this but AFAIK they are unique in this in common law jurisdictions. – Dale M Sep 19 '19 at 9:42
  • @GeorgeWhite "What makes the service company an obligor to the end user?" The contract intent that the performance for which the service company was hired be in favor of the end user. See entry for obligee in Black's Law Dict. See also Restatement (Second) of Contracts at § 302 and § 309(1) (regarding the duty to a beneficiary). Note that Id. at § 309(4) speaks in terms of the beneficiary's rights against the promisor notwithsanding that the contract is between the promisor and the promisee. Similarly, Id. at § 311(4) & 328(2). – Iñaki Viggers Sep 19 '19 at 11:37
  • @DaleM "Third parties, even if they benefit, generally have no right to sue under contract". Wrong. You might have in mind law that is --at best-- obsolete and superseded, or where the intent was not expressly the benefit of a third-party. See Smith v. Town of Cramerton (U.S. Dist. Court, W.D. North Carolina. 2019) (recognizing the right of a third-party beneficiary to sue for breach of contract, citing cases). Also WM. T. Burnett Holdings v. Berg Bros., 175 A.3d 876, 880-881 (2017). – Iñaki Viggers Sep 19 '19 at 12:01
  • Even if the contract were in North Carolina, how is the OP “a direct and not incidental beneficiary”? – Dale M Sep 19 '19 at 12:10

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