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90 Tul. L. Rev. 75 (2015-2016)

handle is hein.journals/tulr90 and id is 95 raw text is: The Puzzle of the Beneficiary's Bargain Nicolas Cornell* Tis Article describes a jurispnudential puzzle-wat I call the puzzle of the benefitciarys batgain--and contends that adequately resolving this puzzle wVill require significant revisions to some of the ways that we think about contract law The puzzle arises when one party enters into two contracts requiring the same performance and the pmmisee of the second contract is the third-party beneficiary ofthe fht. For example, a taxi driver contracts with a woman to ftansport herparents from the airport and then separately enters into a contract with the parents to transport them. Is the second contract valid and enforceable, or does it fail for lack of consideration? This specific question-on which courts have split-impicates several important contract law doctrines. Moreover, it highlights a deep tension in our modem understanding ofcontractual obligation. ThisArtcle argues that adequately resolving the puzzle necessitates a general reconsideration of the relationship between nghts and hability in contact law. Surprisingly, the best solution requires abandoning the foundational understanding that contact liability arises out of breach of a promisee ight to performance. This relatively specific puzzle thus offers a lens diough which to examine general concepts ofmodem contract law. 1. INTRODUCTION .......................................................................... 77 A. Two Overlapping Contracts ............................................ 80 B. Enforcing the Second Contract. Johnson v. SEACOR Marine Corp ................................................... 82 C Rejecting the Second Contract: Youngstown W elding ............................................................................ 84 D The Dilemma ................................................................... 86 II. THE TROUBLE WITH NOT ENFORCING ................... 87 A. Is There Consideraton in a Subsequent Promise?! ........ 88 1. The Old Puzzle of Successive Contracts ................ 88 2. The Modem Consensus .......................................... 93 B. Is a Subsequent Promise to a Third-Party Beneficiary Different?. .................................................... 99 III. THE TROUBLE WITH ENFORCING ................................................. 102 A. FourMutually Jnconsistent Propositions .......................... 102 * © 2015 Nicolas Cornell. Assistant Professor, Legal Studies and Business Ethics Department, The Wharton School, University of Pennsylvania. I am grateful for comments, suggestions, and encouragement from Emily Dupraz, Charles Fried, Sarah Light, Eric Orts, Nick Sage, T.M. Scanlon, Richard Shell, Seana Shiffrin, Kevin Werbach, William Woodward, members of the Wharton Legal Studies and Business Ethics Junior Faculty Workshop, and audience members at the 9th International Conference on Contracts. I received research assistance for this Article from Matt Caulfield and Matt Goodman.

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