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Privity is a key principle in contract law. Those who are parties to the contract can sue on it. Those who aren't, cannot.

Even in contracts where a huge number of people can sue, it's usually because each of that huge number of people is a party to the contract. (For example, ten million people download some open source software, where each individually is a party to an offer and implied acceptance of licensing terms).

But what if I wanted to specifically write a contract in which the essence was that anyone could sue to enforce it, not just the parties? What is the magic phrasing, or legal mechanism, to do so?

Examples:

  • I want to enter a contract with B, where (as a contractor) I give copyright of software I write for B's business to B, and as part of consideration, B agrees to make it publicly available for free download under an appropriate open source license, within at most 3 years. I want anyone in the world to be able to sue to enforce that, so that it doesn't matter if I've died, or my executors and heirs aren't bothered or lack funds.
  • I want to sell a business, but being ethical, the future owner must agree that spare parts for my product will be maintained available up to 10 years after product discontinuation. Again, as above, I want to be sure that even if I die and my successors in title don't care, any third party can sue to enforce or for damages, if they breach and past model spares aren't maintained.

I can imagine that it's possible to set up a trust or prepay/pre instruct a law firm so that things can be done under my authority even so. Or that I could build a mechanism into my will, or a living will, in some way, if the concern is death or incapacity. The problems with these approaches are that, nobody else can enforce those if my representatives can't/won't, and nobody else can claim a right to be involved in the legal decision how my representatives conduct a case (if they do), what they agree to, or how they enforce it.

So I'm looking for solutions that directly within the contract wording itself, extend the ability to sue the contracting party for breach, to anyone in the world in some class (or indeed any person in the world if that's the class), even if they weren't a party to the contract and even if they have never themselves explicitly entered a legal relationship with the contracting party.

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  • "For example, ten million people download some open source software, where each individually is a party to an offer and implied acceptance of licensing terms" <-- nope. Open source licenses are not contracts; they're licenses. They're a one-way grant of additional permissions that the recipient might or might not need (and can ignore if they don't need); there's no consideration as would be needed to form a contract. Mar 2, 2022 at 3:29

2 Answers 2

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what if I wanted to specifically write a contract in which the essence was that anyone could sue to enforce it,not just the parties?

Intended beneficiaries have standing to sue for a breach of contract that infringes the rights to which the contract entitles them. See Restatement (Second) of Contracts at §302 et seq.

Both of the scenarios you outline convey the existence of intended beneficiaries. Accordingly, the contract only needs to be reasonably clear as to who the intended beneficiaries are. The intended beneficiaries can be identified in terms of persons/entities, classes thereof, or they might be implied from the nature and scope of the contract.

By contrast, some jurisdictions are explicit in that incidental beneficiaries lack standing to sue. Two examples are Myers v. Richland County, 429 F.3d 740, 749 (2005) and Boston Executive Helicopters .LLC v. Maguire, 196 F.Supp.3d 134, 142 (2016). See also Hoy v. Incorporated Village of Bayville, 765 F.Supp.2d 158, 173 (2011) ("An intention to assume an obligation of indefinite extension to every member of the public is seen to be the more improbable when we recall the crushing burden that the obligation would impose", citations omitted).

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  • Dawn, forgot to add tag "united kingdom". Not sure how applicable this is, here? That's my primary interest. Although curious US situation, of course. Also for the U.S., in those U.S. jurisdictions that don't allow suing as a beneficiary, how can the right be included by explicit contract wording instead? Or is there literally no way?
    – Stilez
    Mar 1, 2022 at 17:14
  • @Stilez ""united kingdom". Not sure how applicable this is, here?" It applies there, at least in controversies that would entail a decree of specific performance such as the scenarios you outline. See Third Party Beneficiary Contracts in England on page 561. In other types of contract disputes, courts in England resort to theories such as implied trusted device (p. 554) to circumvent from an equity standpoint the Twedle v. Atkinson decision that otherwise would prevent a beneficiary from filing suit. Mar 1, 2022 at 18:29
  • @Stilez "in those U.S. jurisdictions that don't allow suing as a beneficiary, how can the right be included by explicit contract wording instead?" What they don't allow is a suit by a beneficiary who is incidental. To overcome that limitation, it suffices to make it explicit in the contract that they are intended beneficiaries. Mar 1, 2022 at 18:32
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As a practical matter, the easiest thing to do would be to establish a trust or non-profit that is expressly identified with authority to enforce the contract for the benefit of your intended beneficiaries.

While third-party beneficiaries can have the ability to sue, if you get too remote and incidental, you get into issues of standing to sue which can invalidate the ability of just anyone with no economic connection to the contract to bring suit.

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