Who can rescind or modify a contract involving a third-party beneficiary before vesting?

Who can rescind or modify a contract involving a third-party beneficiary before vesting?

• A. Promisor and Promisee
• B. Third-Party Beneficiary
• C. Promisor only
• D. Promisee only

Answer: (A)

Before vesting, a contract involving a third‑party beneficiary is a deal only between the promisor and the promisee. The third-party beneficiary hasn’t yet gained enforceable rights, so they cannot compel changes or block them. That means the two parties who formed the contract control it and can rescind or modify the terms by mutual agreement. The third-party beneficiary cannot unilaterally alter or reject changes while their rights are not yet fixed. Once vesting occurs, the beneficiary’s rights are settled and future changes become more restricted, but prior to vesting the power to rescind or modify lies with the promisor and promisee jointly.

Before vesting, a contract involving a third‑party beneficiary is a deal only between the promisor and the promisee. The third-party beneficiary hasn’t yet gained enforceable rights, so they cannot compel changes or block them. That means the two parties who formed the contract control it and can rescind or modify the terms by mutual agreement. The third-party beneficiary cannot unilaterally alter or reject changes while their rights are not yet fixed. Once vesting occurs, the beneficiary’s rights are settled and future changes become more restricted, but prior to vesting the power to rescind or modify lies with the promisor and promisee jointly.