What conditions must be met for a defendant to be liable to a third-party beneficiary?

For a defendant to be liable to a third-party beneficiary, it is essential to understand the foundational legal principles that govern the relationship between the contracting parties and the beneficiary. The correct choice highlights that negligence in preparing the legal transaction must be foreseeably harmful, establishing a connection between the defendant's actions and the outcomes experienced by the beneficiary.

In this context, 'negligence' refers to a failure to exercise the care that a reasonably prudent person would under similar circumstances, leading to harm. For a third party to have grounds for a claim, it must be shown that the harm was not only foreseeable but also a direct result of the improper actions taken during the execution of the contract or legal transaction. This aspect of foreseeability is crucial because it establishes that the defendant had a duty of care towards the third-party beneficiary, which is breached when negligent actions are taken.

In contrast, the other choices do not satisfactorily establish the conditions for liability. Direct involvement of the beneficiary in the contract could simplify their status but is not mandatory for establishing liability. Claiming that the harm must be severe and intentional places an unnecessarily high standard on third-party claims, moving away from the typical standards of liability. Lastly, while a beneficiary could choose to sue in their own right