The Third Party Beneficiary Rule in the New York Court of Appeals

Abstract

This paper addresses leading New York Court of Appeals decisions on third party beneficiary law from its beginnings in Lawrence v. Fox, through its developmental stages, and culminating with the modern Court’s adoption of the Restatement (Second) of Contracts (1981) in Fourth Ocean Putnam Corp. v. Interstate Wrecking Co., Inc. Subsequent developments in the Second Circuit are then addressed, notable for the intersection of third party beneficiary law with priority among secured creditors.The goal of this paper is to trace the development of the Court’s varied approaches to the unique problems presented by these cases, and outline some of the equitable solutions and guidelines used by the Court of Appeals in its leading decisions on the topic. Throughout, this paper will attempt to draw a thematic thread through these decisions, and close in a reprise attempting to follow the thread backwards to the early Court of Appeals, analyzing whether and to what extent the Court has evolved in its view on the topic.