KMART Corporation v. Balfour Beatty, Inc.
District Court of the Virgin Islands
994 F.Supp. 634 (1998)
Balfour Beatty, Inc. (BBI) (defendant) contracted with Tutu Park Ltd. (TPL) to build a shopping center where KMART Corporation (KMART) (plaintiff) was to be a tenant, with the contract requiring BBI's construction schedules to comply with KMART's requirements, design drawings to be submitted to KMART, and warranties to be executed in KMART's favor and delivered directly to it; the contract also required all disputes to go to arbitration. After Hurricane Marilyn damaged the shopping center's roof in 1995, KMART sued BBI directly for breach of contract and negligence, claiming third-party-beneficiary status under the BBI-TPL contract, and BBI moved to dismiss, arguing KMART was not a beneficiary or, alternatively, that any KMART claim should be stayed pending arbitration.
Whether, absent a contrary agreement between promisor and promisee, a beneficiary of a promise is an intended third-party beneficiary if recognizing a right to performance carries out the parties' intent and either satisfies the promisee's payment obligation to the beneficiary or shows the promisee intended the beneficiary to receive the promised performance's benefit.