This section is from the book "Popular Law Library Vol3 Contracts Agency", by Albert H. Putney. Also see: Popular Law-Dictionary.
There are, however, a few real or apparent exceptions to this general rule.
In general a contract cannot confer rights on a third person, but if a person purchases property with money belonging to another, there will be a resulting trust in favor of the party whose money was used to make the purchase.1 Again, if one conveys property to any person directing that he hold it for the benefit of a third party, a trust is created in favor of such third party which he can enforce in a court of equity.2
1 Murry vs. Sell, 23 W. Va., 475; Newton vs. Taylor, 32 Ohio St., 399; see also, subject of Trusts, Vol. VII, Subject Twenty-one. 2 Chace vs. Chapin, 130 Mass., 128.
Again, "The bargain between the parties may be, that one of them shall confer a benefit on a third person. And, if the consideration for it is adequate, the consequence does not depend on the motive; as, whether it was to do a favor to the third person, or was an arrangement of convenience to the parties. Nor is it material in whose name the rules of practice require the action to be brought as, whether at law by one party against the other, or at law by the third person against the party promising, or by a suit in equity. The third person has open to him the one of these three methods which the particular facts and the practice of the court may indicate." 3
A contract cannot impose liabilities on a third person. For instance, "a man cannot, of his own will, pay another man's debt without his consent, and thereby convert himself into a creditor."4 The nearest approach to an exception to this rule, is the old doctrine that the making of a contract between master and servant, imposes a duty on third parties, not to induce the servant to break it.5 Some courts extend this doctrine to the case of other contracts.6
Contracts made by agents which furnish some apparent, but not real, exceptions to these principles will be considered under the subject of Agency.7
 
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