Contract & Third Party Beneficiary Enforcement Lawyers

Dallas, Texas

A third-party beneficiary is someone who is not a contracting party of a contract but can still receive the benefits from the performance of the contract.

Third-Party Beneficiaries & Contract Enforcement in Texas

Most people assume that contracts consist of only two parties, but Contract Law is more complex than that. In fact, there can be additional parties that reap benefits from a contract’s performance and suffers when that contract is breached. This is known as a third-party beneficiary.

Third-Party Beneficiaries Categories

A third-party beneficiary can be either a donee or a creditor. A donee would benefit from a contract free of charge and not in exchange for a service they provided, as where a creditor is one where an obligation is owed by the promise - such as a home lender. Thus, there are two kinds of third-party beneficiaries: an “intentional or intended” beneficiary and an “incidental” beneficiary. 


An incidental beneficiary is a person or legal entity that is not party to a contract and becomes an unintended third-party beneficiary to the contract through acts or implications which benefits the third party. An incidental beneficiary typically does not have any legal rights under the contract.


Importantly, parties can contract within the body of an agreement that no third-party beneficiaries are intended created by the agreement thus avoiding unintended liability.

Third-Party Beneficiary & Contract Rights

It should be known that both a donee and creditor beneficiary can enforce contract rights so as long as they’re intended beneficiaries. The one named as the beneficiary on a life insurance policy is a great example of an intended beneficiary. In general, an intended beneficiary is one that is:


  • Identified in the contract; or
  • Receives performance directly from the promisor; or circumstances demonstrate that the promise will give the beneficiary the benefit from the contract.


For instance, a case in 2012, Logan-Baldwin v. L.S.M. General Contractors, Inc., hired LSM for renovations. LSM then hired Henry Isaacs, a subcontractor, to do the roofing. Henry Isaacs then hired Hal Brewster for additional assistance. Brewster ended up causing damage to the said home, causing the homeowners to in return have to fix the damages. The homeowners sued LSM and Isaacs for a breach of contract. Isaacs tried to argue that the homeowners did not have standing to enforce that subcontract with LSM because they were not intended third-party beneficiaries of the subcontract.

Ultimately the court disagreed with Isaacs and stated that the homeowners were in fact intended third-party beneficiaries and had standing for the suit. The court reasoned that those circumstances indicated that the homeowners were intended third-party beneficiaries by looking at the contract as a whole. 

Third-Party Beneficiary Vesting Rights in a Contract

In order for a third-party beneficiary to enforce a contract, their rights under the agreement must have been vested, meaning the rights must have come into existence. A contract becomes enforceable by the third-party upon vesting.  Before a third-party beneficiary’s rights are vested, the original parties that contracted can modify their contract however they see fit.


Once the rights have been vested, the original parties can’t change the contractual rights without the beneficiary’s agreement beforehand.  A third-party beneficiary’s rights vest when any of the following occur:


  • The beneficiary assents to the promise in a contract in the manner requested by the parties;
  • The beneficiary sues to enforce the contract’s promise; or
  • The beneficiary materially changes position in justifiable reliance on the contract’s promise.


A third-party beneficiary is not consider an outsider to the contractual agreement, but rather an central beneficiary who's rights are legally protected and enforceable.

a blue and orange check mark with the letter w on it as the Wilson Legal Group Logo

CLIENT MATTERS


5,000+


YEARS OF SERVICE

 25+

Award Winning

Recognized in the legal industry as dedicated board-certified lawyers and Rising Stars.

Expert Team

Your project will be handled by legal experts every time. You will have the most experienced attorneys working for you. 

Quality Representation

You’ll find the support you need to ensure that things run smoothly. We’re here to help with all your legal needs.

Meet Our Team

View All
A bartender is pouring whiskey into a glass at a bar.
By John Wilson May 6, 2025
TABC Administrative Proceedings in Texas 
A person is holding a cell phone in front of a book titled artificial intelligence
By John Wilson February 19, 2025
Copyright and Translated Content: Who Owns the Creative Rights? Understanding Copyright Law and Translation Copyright law protects creative work and bestows sole authority over the work upon the creators. For example, the owner of the work of a novel has the right over the work under the concept of the right under the copyright. Courts have found that “the degree of protection afforded by the copyright is measured by what is actually copyrightable in the publication and not by the entire publication.” See, e.g., Dorsey v. Old Sur. Life Ins. Co., 98 F.2d 872, 873 (10th Cir. 1938) (emphasis added). For translations, the situation is not very clear. Translations involve creative judgments over word translation and not the translation of mere words. Hence the knowledge about the applicability of the concept of the right over the work is essential for establishing the right over the work. For example, a Court in the Northern District of California stated that: “ the determinative question is whether Plaintiff holds a valid copyright. ” Signo Trading Intern. Ltd. v. Gordon, 535 F. Supp. 362, 363 (N.D. Cal. 1981). The Signo Trading Court dismissed Plaintiff’s infringement claims because plaintiff did not have a valid copyright as a matter of law in the translations and transliterations at issue because they lacked the “requisite originality.” Id. at 365. Can Translation Be Considered a Creative Process? The Practice of Translating Translation goes beyond the replacement of one word by the equivalent word from the source text. Translating literary work, poetry, and fiction with deeper meanings beyond the surface text is a complex, artistic process. Translating books like The Iliad, for instance, requires the practice of artistic translation to translate the emotions, thoughts, and the culture correctly. Technical Translations and Legal Translations Conversely, technical writing and texts for the law need less creativity and instead value correctness over all else. These writing forms require strict adherence to the original sense, leaving very little room for artistic interpretation. Translations for these writing forms thus typically involve less creative contribution and less potential for the work being protected by copyright. Why Is Creativity Important for Translations for Copyright? Originality when translating For a work to be subject to copyright, some creativity, however slight, is essential. Even when the translation is taken from the work, the translation also includes some creative work by the translator. This creativity can make the translation subject to copyright. A derivative work must “recast, transform[], or adapt[]” a preexisting work and “consist[] of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship.” Id. In other words, it must change or alter the pre-existing work’s content and must itself be an original work of authorship. The Supreme Court stated that “ [t]he sine qua non of copyright is originality ” and that “ [t]o qualify for copyright protection, a work must be original to the author. ” Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 361 (1991) at 345. “Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity.” Id. (citing 1 M. Nimmer & D. Nimmer, Copyright §§ 2.01[A], [B] (1990)). In granting a Rule 12 motion to dismiss, the Signo Trading Court held that: " It is inconceivable that anyone could copyright a single word or a commonly used short phrase, in any language. It is also inconceivable that a valid copyright could be obtained for a phonetic spelling, using standard Roman letters, of such words or phrases. Although lists of words and translations of larger works may be copyrightable, Plaintiff cannot claim credit for any of the elements which make those things copyrightable. For these reasons, Plaintiff does not hold a valid copyright on the translations or transliterations ... " Signo Trading, 535 F. Supp. at 365. The Problem of the Derivative Work However, translations are generally "derivative works" - derived from the work of another. Because of this, the owner or author of the work is generally required to agree to the translation. Translations made illegally can be held under the classification of copyright violations, even when the translator has added creative elements. Who Has the Right over the Translated Work? Employer-Commissioned Translations Ownership of the copyright for the translation work varies. If the translation is commissioned by the owner of the original work, the owner will retain the right. Even when the translator adds creativity by passing over the original emotions and thoughts, the owner will not necessarily lose the right over the translation work. In some circumstances, the translation work can be accredited by the translator without them holding the right over the work. Independent Translations If a translation is performed independently by the translator, the translator can even be identified as the co-author of the translation. Nevertheless, the author typically has the underlying copyright, restricting the translator’s right over the work. Creative Translations from the Public Domain In certain cases, a translation may be creative enough to warrant its own copyright. For example, a translator adapting a classic work or a book in the public domain into modern language may introduce enough originality to qualify for copyright protection. However, direct, word-for-word translations are typically not considered original enough to receive new copyright protection. What About Machine Translations? The Human Creativity Copyright Requirement Machine-generated translations, including those produced by platforms like OpenAI , operate through advanced algorithms that replicate language patterns rather than capture the human touch. Unlike translations crafted by human translators who often infuse cultural insight and genuine emotion into the work, OpenAI's output is rooted in statistical patterns and data. Consequently, while these translations are impressively efficient and accurate, they typically fall short of the originality required for copyright protection. This distinction underscores the human creativity requirement needed to secure a valid copyright . Ultimately, although machine-generated translations serve as powerful tools, they do not offer the same legal and creative protections as those provided by human translators. The Bottom Line: Navigating Copyright in Translations Translations occupy the middle ground under the law of the copyright. Albeit the right of the original author generally has the right under the copyright, the right under the copyright can also be claimed by the translator provided the translation is creative enough. Central considerations here include the creativity the translator has added, the nature of the work being translated, and whether the work is under the public domain. These considerations establish the right of the owner under the copyright for the translation. Why Wilson Whitaker Rynell for Your Copyright Work? At Wilson Whitaker Rynell, our professional lawyers specialize in the practice of copyright law and copyright litigation , including the complex subject matter of translation work. We can provide you with advice about the ownership of your work under the provisions of the copyright, and protect your creative property. If you are the author, the publisher, or the translator, you can rely upon the advice from our firm. Copyright Translation FAQS
A building with a sign that says law offices on it
By John Wilson February 12, 2025
Strategic Legal Representation for Complex Business Litigation
Show More