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A person who is not a party to a contract but has legal rights to enforce the contract or share in proceeds because the contract was made for the third party’s benefit. example: grandma enters into a contract with oldfield to purchase a jaguar automobile to be given to grandchild as a graduation present. if oldfield takes a down payment and then refuses to go through with the sale, grandchild may sue oldfield for specific performance of the contract as a third-party beneficiary.

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