The suit filed by Clayton will prosper.

Clayton can collect from

Waterworks for the damages he incurred from the house hire since he is a
third party beneficiary and a taxpayer. Even though he is not a direct party
to the contract and he was not an intended beneficiary of the contract, he
will still benefit from the contract. It can be seen on the contract that the
main parties to the contract are the City of Cambridge and Waterworks in
order that the fire-hydrants have high-pressure water supply. However,
said contract was breached by the waterworks which resulted to the
burning of the house of Clayton.

As a general rule, the contract entered into between parties governs

only the two contracting parties. It can be concluded that only parties to a
contract may sue for breach of a contract. Contract confers rights and
imposes liabilities only on its contracting parties. Ordinarily, only those
who are parties to the contract have the rights and duties with respect to
the contract. However, one of the known exception is third-party
beneficiary contracts. A third-party beneficiary contract is intended to
benefit a third person, who in turn can enforce the contract. Not everyone
who benefits from the performance of a contract between other persons is
not entitled to sue as a third-party beneficiary. His contention that they are
the intended beneficiary and as a result he can sue waterworks can
prosper.

In this case, Clayton can sue despite the fact that he is not a party to
the contract. Waterworks is not in contract of Clayton and that Clayton is
only an incidental beneficiary in this case which under the law has no right
to sue. However, despite that he is only an incidental beneficiary, he can
still claim over the damages. The members of the public like Clayton, are
not automatically intended beneficiaries of the contracts and but can
enforce the third-party rights to challenge or enforce what is stated in the
contract or to receive any damages for their breach. They can enforce what
the contract is all about. It can be said that Clayton has legal standing to
sue waterworks for the breach of the contract. Again, the face of the
contract, the principal beneficiaries of the contract n contemplation of
both parties thereto were the company on the one hand and the individual
citizens on the other hand. The citizens are the ones who are paying taxes
without paying taxes, the government cannot enter into contract. By
paying their taxes, furnishing the individuals adequate supply of water and
the protection of their property from fire, was the largest duty assumed by
Waterworks.