Tweeddale v. Tweeddale – Case Brief
Tweeddale v. Tweeddale, 116 Wis. 517, 93 N.W. 440 (Wis. 1903).
Facts: Daniel Tweeddale (D) received land from his mother in exchange for a bond for $1350 to be paid if he later sold the property. Under the terms of the agreement $1200 of the bond was to be paid to the mother, $50 to his sister, and $100 to his brother Edward Tweeddale (P).
Daniel sold the real estate and paid his mother but did not settle with his siblings who were unaware of the agreement. The mother released the bond. When Edward learned of the agreement he sued to recover his promised share. The plaintiff appealed the trial court’s ruling that he did not have a cause of action.
Issue: May a party rescind a contract that is supported by consideration and names a third party beneficiary, even if the third party beneficiary is unaware of the transaction?
Holding and Rule: No. A party may not rescind a contract that is supported by consideration and names a third party beneficiary, even if the third party beneficiary is unaware of the transaction.
The court reasoned that an exchange of consideration creates a relationship of privity such that the third party beneficiary is entitled to receive the benefit of the contract despite not knowing of the existence of the agreement. Such an agreement is not akin to a gift promise which can be rescinded if not supported by consideration unless promissory estoppel applies.
See Congregation Kadimah Toras-Moshe v. DeLeo for a law school contracts case brief holding that an oral gift promise is unenforceable if it is not in writing or if there has been no reliance by the promisee.