What is the term for a party intended to benefit from a contract between two other parties?

The term used to describe a party that is intended to benefit from a contract between two other parties is a "beneficiary." This concept is fundamental in contract law, where contracts can be established for the direct benefit of someone not involved in the agreement itself.

In many situations, contracts are created not only for the primary parties directly involved but also to confer benefits to third parties. For example, in a life insurance policy, the insured (first party) pays premiums to an insurance company (second party) in order to benefit a designated individual (the beneficiary) upon their death.

This clarity of purpose signifies the beneficiary's right to receive benefits stipulated in the contract, illustrating how they can enforce those rights should the contract be violated. Other roles in contract law, such as the assignor or obligor, do not pertain specifically to benefiting from the contract itself in the way that a beneficiary does. The term "incidental party" refers to a party that receives some benefit from the contract, but it is not intended or provided for expressly. Thus, the correct terminology that captures the specific role of being meant to benefit from a contract is "beneficiary."