Please note that the names used in this post are for example and ease, not reflective of an actual case or controversy.
This is an interesting question because sometimes the answer of whom to sue in a lawsuit is not always immediately clear. Careful analysis should be done before suing someone to make sure that there is a legal basis for the claim. The careful analysis of what claims there are in a lawsuit and whom to sue is critical to establishing the claims and the potential success of the suit.
You can sue someone who received the money and promised to return your money.
This may seem straightforward, but anyone who both received the money and promised to return it to you can potentially be sued. This would be a fairly straightforward breach of contract.
What if the money was given to say Bob (for example) and Bob promised to pay back but the money was intended to help Bob’s son, friend, etc (Call him Dylan who is 20 years old)?
Let’s also assume that there was no agreement directly with Dylan. In this case, Dylan, even if he received the benefit of the money, would not be liable for paying the money back. This is because Dylan does not have what the law calls privity or an agreement with the lender of the money. This is similar to if a credit card company lends money to one person and that person decides to give the money to someone else. If the credit card company had no agreement with that person, then that person does not owe money to the credit card company. That ultimate person may owe the money back to whomever gave it to them depending on the agreement between the parties.
Why can’t I just sue everyone connected to the parties?
This is because (using the Bob (father) and Dylan (son, 20 years old) example from above), the lender has no agreement with Dylan, so he cannot prove the terms or conditions or even existence of a loan. Further, people cannot bind other people to contracts unless they have some right or position that allows them to bind others to a contract. For example, an adult father can’t bind his adult son to a contract. However, a Company officer can bind a company because of the position of being an officer. Similarly, a parent could agree to pay back a contract with their kid. Additionally, a guaranty can make the guarantor liable for a contract with another party, but that is part of the written agreement for a guarantee.
