Donee Beneficiary

AAA

DEFINITION of 'Donee Beneficiary'

A person who is considered a non-party in a contract but still receives a benefit from the completion of the contract. A donee beneficiary could also be the third party that benefits from a donation or gift. For example, Sam (donor) promises to gift a gold watch to Phil (donee). To get this watch Sam will buy it from Mike (third party). In this case, Mike is the donee beneficiary in Sam and Phil's exchange. If Sam went back on his promise, Mike would not sell the watch. Mike benefits but is not actually part of the contract.


Also known as a third party beneficiary.

INVESTOPEDIA EXPLAINS 'Donee Beneficiary'

A donee beneficiary has no rights to their benefits if they do not know that a contract exists. But the donee beneficiary has a right to file for damages if he/she has vested. For example, if the donor beneficiary knows about the contract and acts on it (in the example above, Mike might build the gold watch), he/she can sue the purchaser if they cancel the contract.

RELATED TERMS
  1. Third Party Beneficiary

    A person who will benefit from a contract made between two other ...
  2. Absolute Beneficiary

    A designation of a beneficiary that can not be changed without ...
  3. Named Beneficiary

    This term refers to any beneficiary named in a will, a trust, ...
  4. Discretionary Beneficiary

    Discretionary beneficiaries are those named in a trust or similar ...
  5. Alternate Beneficiary

    In a will, an alternate beneficiary is usually named in case ...
  6. Primary Beneficiary

    A beneficiary in a will, trust or insurance policy that is first ...
Related Articles
  1. Designating A Trust As Retirement Beneficiary
    Retirement

    Designating A Trust As Retirement Beneficiary

  2. Why Your Will Should Name Designated ...
    Home & Auto

    Why Your Will Should Name Designated ...

  3. Mistakes In Designating A Retirement ...
    Retirement

    Mistakes In Designating A Retirement ...

  4. Your Will: Why You Need A Power Of Attorney ...
    Options & Futures

    Your Will: Why You Need A Power Of Attorney ...

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center