business law

third-party beneficiary

Definition

A person who is neither a promisor nor promisee in a contractual agreement, but stands to benefit from the contract’s performance. A third-party beneficiary may legally enforce that contract, but only after his or her rights have already been vested (either by the contracting parties’ assent or by justifiable reliance on the promise).

According to the Restatement (First) of Contracts § 133 (1932), there are three classes of third-party beneficiaries:

 

Sherman Antitrust Act

Definition

A federal anti-monopoly and anti-trust statute, passed in 1890 as 15 U.S.C. §§ 1-7 and amended by the Clayton Act in 1914 (15 U.S.C. § 12-27), which prohibits activities that restrict interstate commerce and competition in the marketplace.

Overview

 

Poison pill

Definition

A corporation’s defensive strategy against a hostile takeover bid in which current shareholders other than the tender-offer bidder or prospective bidder, upon a triggering event, have the right to purchase additional corporate stocks at a deeply discounted price. The effect is to dilute the value of the stock and increase the bidder’s acquisition costs. Also called a shareholder rights plan.

 

minimum contacts

Definition

A nonresident defendant’s connections with the forum state (i.e., the state where the lawsuit is brought) that are sufficient for jurisdiction over that defendant to be proper. Lack of minimum contacts violates the nonresident defendant’s constitutional right to due process and “offends traditional notions of fair play and substantial justice” (International Shoe Co. v. Washington, 326 U.S. 310 (1945)). Examples of minimum contacts include conducting business within the state, incorporating in the state, and visiting the state.

 

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