Third-Party Beneficiary Legal Meaning and Definition

Here is a simplified definition of the legal term Third-Party Beneficiary.

Third-Party Beneficiary (noun):

A third-party beneficiary is an individual or entity who benefits from an agreement made by two other parties, despite not being a direct participant in the contract. This person or group can exercise legal rights, such as suing in case of contract breach, as long as the contract was made specifically for their benefit. This term is typically used in contract law contexts.