Judicial principles and studies
Relative Effect of Contracts, Stipulation for a Third Party, and Burden of Proof
The legal points indicate that contracts bind the contracting parties and their universal successors; a stipulation for a third party can create a direct right for that third party; agency or representation must be proved and the burden of proof rests on the claimant.
Updated: 10 September 2026
Prepared and reviewed by: Ashraf Al-Khawaja
Subject
The presented rules indicate that, as a general principle, a contract does not create an obligation on a third party, although it can confer a right on that third party. Provisions allow a person to contract in their own name while stipulating rights for a third party, which results in a direct right for that third party. The effects of a contract are limited to the contracting parties and universal successors, with referenced provisions permitting the grant of a right to a third party.
Summary
Contracts primarily bind the parties and their universal successors; stipulation for the benefit of a third party is a mechanism that can create a direct right for that third party. Agency or representation is an incidental attribute that requires proof, and the burden of proving it lies with the person asserting it. This content is a general educational summary and is not a judicial text or legal advice.
Practical significance
When intending to grant rights to a third party, use a clear stipulation mechanism to produce a direct right. Claims that a person acts as agent or representative should be supported by evidence, since contracts do not generally impose obligations on third parties unless a direct right has been conferred.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.