Alaniz v. Schal Associates
Citation and Court
Alaniz v. Schal Associates, Inc., 147 Ill. App. 3d 1037 (Ill. App. Ct. 1986)
Facts
Schal Associates was the general contractor on a construction project and entered into a contract with the project owner that required Schal to pay its subcontractors. Alaniz, a subcontractor, was not paid and brought suit as a third-party beneficiary of the contract between Schal and the owner. The subcontractor argued that the contract’s payment provisions were made for its direct benefit.
Issue
Whether a subcontractor on a construction project qualifies as an intended third-party beneficiary of the contract between the general contractor and the project owner.
Holding
The court held that the subcontractor was an intended third-party beneficiary of the general contractor–owner contract and could enforce the payment obligations directly.
Rule / Doctrine
A third party may enforce a contract if the contracting parties intended to confer a direct benefit on that third party, not merely an incidental one. On construction projects, subcontractors named or clearly contemplated in payment provisions may qualify as intended beneficiaries.
Significance
Illustrates the application of third-party beneficiary doctrine in the construction context, where subcontractors frequently rely on upstream contract obligations for payment. Distinguishes intended from incidental beneficiaries in a commercial setting.