When it comes to bilateral contracts that involve a third party, it`s important to understand who the promisor is. The promisor refers to the party who agrees to fulfill the terms and obligations of the contract. In a bilateral contract that benefits a third party, there are two types of promisors: the obligor and the promisor.
The obligor is the party that is primarily responsible for fulfilling the terms of the contract. They are the party that has a direct relationship with the third party beneficiary and are responsible for providing the benefit that was agreed upon in the contract.
On the other hand, the promisor is the party that agrees to ensure that the obligor fulfills their obligations under the contract. In other words, they act as a guarantee that the third party beneficiary will receive the promised benefit from the obligor.
For example, let`s say that John and Jane enter into a contract where John agrees to pay Jane $500 to paint her house. However, Jane wants the benefit of the contract to go to her friend Susan, who is the third party beneficiary. In this case, John is the obligor since he is responsible for painting Jane`s house, while Jane is the promisor since she`s guaranteeing that John will fulfill his obligations to Susan.
It`s important to note that the promisor may or may not have a direct relationship with the third party beneficiary. In some cases, the promisor may be a separate entity or individual that is not directly involved in the contract, but is still responsible for ensuring that the obligor fulfills their obligations.
In conclusion, understanding who the promisor is in a bilateral contract that benefits a third party is essential for all parties involved. It ensures that the third party beneficiary receives the benefit that was agreed upon and that all parties fulfill their obligations under the contract.