Third Party Beneficiaries

Is the purchaser of property a "Third Party Beneficiary" of a contract between a mortgage company and a surveying firm for the preparation of a mortgage survey report?

In the case of CATHERINE M. FECHIK v DELTA LAND SURVEYING AND ENGINEERING, INC., the Michigan Court of Appeals addressed the issues of whether plaintiff (Ms. Fechik) was a third-party beneficiary of the contract between defendant (a surveying firm) and the mortgagee/bank; and whether defendant owed plaintiff a duty of care even though she was not a party to the contract regarding the mortgage report prepared in connection with property she was purchasing.



In its conclusion the Court stated: "In this case, plaintiff argues that she was a third-party beneficiary of the contract because the mortgage report was prepared to allow her to obtain financing for the subject property. However, as discussed above, plaintiff clearly was not an intended third-party beneficiary of the contract. The mortgage report unambiguously provided that it was prepared for the exclusive use and benefit of the mortgagee, for identification purposes only. Although plaintiff may have incidentally benefited from the performance of the contract, the contract did not provide for something to be done directly to or for plaintiff. Accordingly, the trial court properly dismissed plaintiff's breach of contract claim. . . ."