Clarence and Herthel Uhl (plaintiffs) owned a farm outside Sioux City, Iowa. The Iowa State Highway Commission (State) decided to connect two highways by building a bypass across the Uhls’ property. The State entered an agreement with the City of Sioux City (City) (defendant) regarding the City’s obligations arising out of the new highway bypass. The City-State agreement said that the City would build a road running under the new bypass along the highways. The State condemned the portion of the Uhls’ property that would be used for the bypass, noting that the Uhls would be able to access their property from “the proposed city street.” The Uhls fought the State over how much money they should receive for the land, and ultimately entered a settlement agreement with the State. However, the City never built the local road, and the Uhls eventually sued the City. The Uhls argued that they were third-party beneficiaries of the City-State agreement and, therefore, had a right to enforce the term requiring the City to build the road. The trial court found that the City-State agreement was not intended to benefit the Uhls and ruled for the City. The Uhls appealed.