third-party vendor
Definition
A third-party vendor is any outside company or individual you hire to provide goods or services for your business, separate from you and your customers. Think of them as anyone on your payroll who is not actually your employee, like a software provider, a delivery company, or a freelance designer.
Example
If you run a bakery and you hire an outside company to handle your payroll processing, that payroll company is your third-party vendor.
Watch Out
When something goes wrong because of a vendor's mistake, your customer may still hold you responsible, so always get a written contract that spells out who is liable for what.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.