Robson v. Robson
514 F.Supp. 99 (N.D.Ill. 1981)
- Robson Sr. and Robson Jr. owned a company together. They entered into a contract to establish a retirement payment schedule for Robson Sr., and to provide for Robson Jr.’s ownership of the company after either party’s death.
- The contract stipulated that if Robson Jr. died Robson Sr. would get the entire company, but have to pay Robson Jr.’s wife $500 a month for 5 years.
- Robson Jr. got divorced. The Robsons drew a line through the provision about Robson Jr.’s wife and initialed the contract. Then Robson Jr. died. Robson Jr.’s wife sued for performance under the original terms of the contract.
- Robson Jr.’s wife was never an actual party to the contract. However, as a third-party beneficiary of the terms of the contract, she has standing to sue.
- A donee beneficiary of a contract is a third party to whom the promised beneficial performance comes without cost as a donation or gift.
- The Trial Court found for Robson Sr. The ex-wife appealed.
- The Trial Court found that the Robsons had a right to rescind the provision in the contract that gave money to a donee beneficiary.
- The rights of a donee beneficiary are more akin to the law of gifts than to the law of contracts.
- The Court found that Robson Jr.’s wife had not acted in her detriment in reliance of the contract. If she had done so, she might have prevailed.
- If Robson Jr.’s wife had relied on the contract, it would be said that she was vested in the contract.
- See Restatement of Contract §311
- An Appellate Court affirmed, but did not publish their opinion.