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Question
Fact Pattern 16-1AAA Properties, Inc., contracts with Best Builders, Inc., to construct an office building. AAA agrees to obtain insurance to cover the project, after which the parties waive their rights against the subcontractors. AAA obtains the policy from City Insurance Company. When the new building is destroyed in a storm, City pays AAA and then files a suit against the subcontractors.
Refer to Fact Pattern 16-1. Under the reasoning of the court in Case 16.3, Midwestern Indemnity Co. v. Systems Builders, Inc., in relation to the waiver in AAA's contract with Best, the subcontractors are
a. incidental beneficiaries and thus liable to City.
b. incidental beneficiaries and thus not liable to City.
c. intended beneficiaries and thus liable to City.
d. intended beneficiaries and thus not liable to City.
Answer
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