662 P.2d 385 (1983)
In real estate contracts, respondent assignor agreed to install a water system for the use of the platted lots and purchasers agreed to pay a portion of the installation cost. Respondent assignor subsequently sold its interest in payment to petitioners and sold its interest in the development to respondent assignee, which assumed the obligation to install the water system for the entire development. Respondents never installed the system, petitioners sued, and the case was dismissed. The appellate court affirmed, holding that respondents' obligation did not run to petitioners and petitioners were not third party beneficiaries.
- Upon review, the court reversed and remanded to the trial court.
- The court held that respondent assignor was liable to petitioners for its failure to install the system since it breached its covenant of good faith to the land purchasers.
- Also, it held that petitioners were third party beneficiaries since respondents' contract directly benefited petitioners.
Court reversed and remanded dismissal of petitioners' action for recovery. Court held that respondent assignor was liable to petitioners for its breach of good faith to land purchasers in its failure to install a water system and that petitioners were third party beneficiaries since respondents' contract intended to benefit petitioners.
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