Determining third-party status

In the case, Cambridge Integrated Services Group Inc. argued that National Union Fire Insurance Co. of Pittsburgh could not be a third-party beneficiary because the contract "could very easily be carried out according to its terms regardless of whether or not [National] had any involvement" with Bank of America.

The court said that while it is true that the contract did not depend upon BOA having an excess carrier, that fact was irrelevant to the determination of third-party beneficiary status. The contract, the court said, expressly anticipated that BOA might have an excess carrier, required Cambridge to notify that carrier, and provided a direct benefit to any excess carrier that was retained.

June 22, 2009

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