Third Party Legal Meaning and Definition

Here is a simplified definition of the legal term Third Party.

Third Party (noun): A term used in legal parlance which refers to someone who is not directly involved with the primary parties in a contract, agreement, or a transaction, yet they may be affected by it or may have a related interest. For instance, in a third-party insurance structure, if a car owned by Principle A (First Party) and insured by Principle B (Second Party), causes damage to Principle C's (Third Party) property, the insurance undertaken will cover the damages for Principle C.