Third-Party Risk
/ˈθɜrdˌpɑrti rɪsk/
Definitions
- (n.) The potential exposure to legal, financial, or reputational harm arising from relationships or transactions with persons or entities not directly controlled by a contracting party.
Companies must assess third-party risk before outsourcing critical functions to vendors.
Forms
- third-party risk
Related terms
See also
Commentary
Third-party risk is often addressed through risk assessments, contractual protections, and ongoing monitoring to mitigate potential liabilities stemming from external relationships.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.