third party

third party definition - business

third party

An individual or other entity who is not a direct party to a contract or agreement, but who somehow has an interest in or is affected by it. For example, an insured driver is at fault in a traffic accident that damages the car of another person, who becomes the third party. The insured driver and his or her insurance company are the direct parties to the contract.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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