Termination of Contracts Containing a Stipulation in Favor of a Third Party

Aarious theories have been proposed regarding obligations in favor of third parties, including offer and acceptance, unauthorized management of another’s property, unilateral obligation, direct creation of a right, and realization of a right from a stipulation for the promisee granted to a third party. The nature of such obligations differs according to these views.This study examines the effect of terminating a contract containing an obligation in favor of a third party. The authors argue that the theory of realization of a right from a stipulation for the promisee, subsequently granted to a third party, provides the most suitable framework. This approach aligns with the parties’ intent and the principle of non-presumption.According to this view, a stipulation in favor of a third party is initially created through the principal contract for the promisee’s benefit, and the promisee then grants the right to the third party. The third party’s acceptance does not affect the stipulation’s formation. As this stipulation is a concession (ibaha), the third party cannot rescind the contract or return to the promisee. However, since the promisor has accepted an obligation, the third party—acting as the promisee’s successor—can compel the promisor to perform it.This perspective ensures clarity in understanding obligations in favor of third parties and emphasizes the binding effect on the promisor, while preserving the original intent of the contracting parties.