what is a third party 
a third party is an individual or entity that is involved in a transaction but is not one of the principals and thus may have a lesser interest in the transaction an example of a third party would be the escrow company in a real estate transaction the escrow party acts as a neutral agent by collecting the documents and money that the buyer and seller exchange when completing the transaction a collection agency may be another example of a third party if a debtor owes a creditor a sum of money and hasn t been making the scheduled payments the creditor is likely to hire a collection agency to ensure that the debtor honors his agreement 