Wednesday, December 1, 2010
An interesting if not unexpected decision from the U.S. Court of Appeals for the Federal Circuit on third party beneficiary contracts.Here’s the court’s description of the question presented in Sullivan v. United States, No. 2010-5091, 2010 U.S. App. LEXIS 24413 (Fed. Cir. Nov. 29, 2010):
The issue in this breach of contract case is whether a person injured in a vehicular accident caused by a government contractor can properly sue the United States for failing to enforce a contract provision requiring the contractor to obtain additional automobile insurance.
The Court of Federal Claims, the trial court. hed held that the whole point of requiring such insurance was to protect people injured by the contractor, and thus the plaintiffs were third party beneficiaries. The Federal Circuit, in a "nonprecedential" ruling, held that the point of the requirement was to protect the government, not injured citizens, and that in any event the government's failure to require the insurance was not a breach of contract by the government.