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Unless a contract specifically provides otherwise, an owner is not a third-party beneficiary of a standard contract between a general contractor and a subcontractor. This principle is illustrated in the case of Outlaw v. Airtech Air Conditioning & Heating, Inc., 412 F.3d 156 (D.C. Cir. 2005).

In this case, an owner hired an architect to draw up the architectural plans required to secure construction permits for renovations to a recently purchased building. The plans included renovations of the building's heating, ventilation and air conditioning (HVAC) systems. The owner retained a general contractor for the project, and the general contractor retained a subcontractor to install the HVAC system. The owner played a very hands-on role over the course of the project. In particular, the owner was heavily involved in many of the project's details which were normally handled by the general contractor.

As the project progressed, problems arose and the owner decided to end his relationship with both the architect and the general contractor. Notwithstanding, the owner requested the subcontractor finish the work on the HVAC system. The subcontractor declined the owner's request; the subcontractor explained that his company was contractually bound only to the general contractor and not to the owner. As a result, the owner hired another firm to finish the HVAC work. However, after the owner moved into the building, the owner discovered the new HVAC system did not work properly and sued the original subcontractor for breach of contract and damages.

Based upon traditional contract law principles, the court found that absent any indication to the contrary in a contract, a property owner is not a third-party beneficiary to a contract between a general contractor and subcontractor. In addition, the court established the standard form contract between the contractor and subcontractor did not contemplate a role for the owner and could not be construed to confer specific rights on the owner. As such, the subcontractor had no duty to the owner, and the court held in favor of the subcontractor.

In response, the owner argued his company was a third-party beneficiary to the general contractor-subcontractor contract because the contract contained language providing that the owner was entitled to "keep any and all parts." In addition, the contract contained a signature line for the "Owner/General Contractor."