Mich. Comp. Laws » Michigan Compiled Laws / Chapter 600 / Act 236 of 1961
Michigan Compiled Laws

Mich. Comp. Laws § 600.1405 (2026)

Rights of third party beneficiaries; contracts included; time promise becomes legally binding; exceptions; promisee's rights; retroactive construction of section.

✓ current as of July 2026
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REVISED JUDICATURE ACT OF 1961


Act 236 of 1961


600.1405 Rights of third party beneficiaries; contracts included; time promise becomes legally binding; exceptions; promisee's rights; retroactive construction of section.

Sec. 1405.

    Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said promise had been made directly to him as the promisee.

    (1) A promise shall be construed to have been made for the benefit of a person whenever the promisor of said promise has undertaken to give or to do or refrain from doing something directly to or for said person.

    (2)(a) The rights of a person for whose benefit a promise has been made, as defined in (1), shall be deemed to have become vested, subject always to such express or implied conditions, limitations, or infirmities of the contract to which the rights of the promisee or the promise are subject, without any act or knowledge on his part, the moment the promise becomes legally binding on the promisor, unless there is some stipulation, agreement or understanding in the contract to the contrary.

    (b) If such person is not in being or ascertainable at the time the promise becomes legally binding on the promisor then his rights shall become vested the moment he comes into being or becomes ascertainable if the promise has not been discharged by agreement between the promisor and the promisee in the meantime.

    (c) If the promisee is indebted or otherwise obligated to the person for whose benefit the promise was made and the promise in question is intended when performed to discharge that debt or obligation, then the promisor and the promisee may, by mutual agreement, divest said person of his rights, if this is done without intent to hinder, delay or defraud said person in the collection or enforcement of the said debt or other obligation which the promisee owes him and before he has taken any legal steps to enforce said promise made for his benefit.

    (3) Nothing herein contained shall be held to abridge, impair or destroy the rights which the promisee of a promise made for the benefit of another person would otherwise have as a result of such promise.

    (4) The provisions of this section shall be construed to be applicable to contracts made prior to its enactment as well as to those made subsequent thereto, unless such construction is held to be unconstitutional, in which case they shall be held to be applicable only to contracts made subsequent to its enactment.

History: 1961, Act 236, Eff. Jan. 1, 1963

Notes of Decisions
Cited in 173 cases (25 in the last 5 years), 1965–2026 · leading case: Shay v. Aldrich, 790 N.W.2d 629 (Mich. 2010).
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Shay v. Aldrich, 790 N.W.2d 629 (Mich. 2010). · cites it 30× “MCL 600.1405 governs the rights of third-party beneficiaries in Michigan and states, in pertinent part: Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said…”
Koenig v. City of South Haven, 597 N.W.2d 99 (Mich. 1999). · cites it 18× “MCL § 600.1405; MSA § 27A.1405 governs the ability of third-party beneficiaries to enforce contracts.”
Schmalfeldt v. North Pointe Ins., 670 N.W.2d 651 (Mich. 2003). · cites it 8× “MCL 600.1405; Koenig v. South Haven, 460 Mich.”
Kammer Asphalt Paving Co. v. East China Twp. Schs., 504 N.W.2d 635 (Mich. 1993). · cites it 8× “Similarly, because we find that defendant may have inequitably received the benefit of plaintiff's labor and materials, we reverse the Court of Appeals affirmance of summary disposition with regard to plaintiff's unjust enrichment and constructive trust counts. Finally, we…”
Brunsell v. City of Zeeland, 651 N.W.2d 388 (Mich. 2002). · cites it 4× “in MCL 600.1405, the third-party beneficiary statute, provides in pertinent part: *296 Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said promise had been made…”
Fultz v. Union-Com. Assocs., 683 N.W.2d 587 (Mich. 2004). · cites it 2× “2d 651 (2003); MCL 600.1405. Rather, a person can be a third-party beneficiary of a contract only when the promisor undertakes an obligation "directly" to or for that person.”
Sumitomo Trust & Banking Co. v. Holly's, Inc. (In Re Holly's, Inc.), 140 B.R. 643 (Bankr. W.D. Mich. 1992). · cites it 5× “This guaranty is limited because it is in the nature of an in rem obligation which only *675 covers Holly’s right to collect management fees; Holly’s has no other liability to Sumi-tomo and Sumitomo cannot seek Holly’s other property under the tacit guaranty. 6. Enforceability…”
Taxpayers of Michigan Against Casinos v. State, 685 N.W.2d 221 (Mich. 2004). · cites it 2× “" MCL 600.1405(1). Here, the tribes have promised to give 2% of their net earnings to local communities, provided those communities create the revenue sharing boards to receive and disburse the payments.”
Vanerian v. Charles L Pugh Co, Inc, 761 N.W.2d 108 (Mich. Ct. App. 2008). · cites it 11× “1405 provides in relevant part: Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said promise had been made directly to him as the promisee.”
Int'l Bus. MacHines Corp. v. Dep't of Treasury, 852 N.W.2d 865 (Mich. 2014). · cites it 2× “See Schmalfeldt v North Pointe Ins Co, 469 Mich 422 ; 670 NW2d 651 (2003); MCL 600.1405. In any event, because I conclude that no such contractual relationship was formed, I find it unnecessary to address this issue sua sponte.”
H&H Wholesale Servs., Inc. v. Kamstra Int'l, 373 F. Supp. 3d 826 (E.D. Mich. 2019). · cites it 4× “) Michigan has a statute that says who is a third-party beneficiary of a contract: "A promise shall be construed to have been made for the benefit of a person whenever the promisor .”
Boylan v. Fifty Eight Ltd. Liab. Co., 808 N.W.2d 277 (Mich. Ct. App. 2010). · cites it 2× “1405, the Legislature has defined, in relevant part as follows, who may claim third-party-beneficiary status with respect to an agreement entered into by other parties: Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right…”
Show all 173 citing cases →
— Mich. Comp. Laws § 600.1405(1) — 30 cases
Shay v. Aldrich, 790 N.W.2d 629 (Mich. 2010). “MCL 600.1405 governs the rights of third-party beneficiaries in Michigan and states, in pertinent part: Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said…”
Taxpayers of Michigan Against Casinos v. State, 685 N.W.2d 221 (Mich. 2004). “" MCL 600.1405(1). Here, the tribes have promised to give 2% of their net earnings to local communities, provided those communities create the revenue sharing boards to receive and disburse the payments.”
Schmalfeldt v. North Pointe Ins., 670 N.W.2d 651 (Mich. 2003). “MCL 600.1405; Koenig v. South Haven, 460 Mich.”
Willis v. New World Van Lines, Inc., 123 F. Supp. 2d 380 (E.D. Mich. 2000).
Brunsell v. City of Zeeland, 651 N.W.2d 388 (Mich. 2002). “in MCL 600.1405, the third-party beneficiary statute, provides in pertinent part: *296 Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said promise had been made…”
— Mich. Comp. Laws § 600.1405(2) — 2 cases
Hammack v. Lutheran Soc. Servs., 535 N.W.2d 215 (Mich. Ct. App. 1995).
First Fin. Bank Na v. Scott T Bosgraaf Trust (Mich. Ct. App. 2015).
— Mich. Comp. Laws § 600.1405(2)(a) — 6 cases
Shay v. Aldrich, 790 N.W.2d 629 (Mich. 2010). “MCL 600.1405 governs the rights of third-party beneficiaries in Michigan and states, in pertinent part: Any person for whose benefit a promise is made by way of contract, as hereinafter defined, has the same right to enforce said promise that he would have had if the said…”
Koenig v. City of South Haven, 597 N.W.2d 99 (Mich. 1999). “MCL § 600.1405; MSA § 27A.1405 governs the ability of third-party beneficiaries to enforce contracts.”
Willis v. New World Van Lines, Inc., 123 F. Supp. 2d 380 (E.D. Mich. 2000).
Ellen M Andary v. Usaa Cas. Ins. Co. (Mich. 2023).
Ellen M Andary v. Usaa Cas. Ins. Co. (Mich. 2023).
— Mich. Comp. Laws § 600.1405(2)(b) — 2 cases
Koenig v. City of South Haven, 597 N.W.2d 99 (Mich. 1999). “MCL § 600.1405; MSA § 27A.1405 governs the ability of third-party beneficiaries to enforce contracts.”
First Sec. Sav. Bank v. Aitken, 573 N.W.2d 307 (Mich. Ct. App. 1998).
— Mich. Comp. Laws § 600.1405(2)(c) — 3 cases
Sumitomo Trust & Banking Co. v. Holly's, Inc. (In Re Holly's, Inc.), 140 B.R. 643 (Bankr. W.D. Mich. 1992). “This guaranty is limited because it is in the nature of an in rem obligation which only *675 covers Holly’s right to collect management fees; Holly’s has no other liability to Sumi-tomo and Sumitomo cannot seek Holly’s other property under the tacit guaranty. 6. Enforceability…”
Jachim v. Coussens, 278 N.W.2d 708 (Mich. Ct. App. 1979).
United States v. Cnty. of Muskegon, 33 F. Supp. 2d 614 (W.D. Mich. 1998).
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