Third party users: Overview, definition, and example
What are third party users?
Third party users refer to individuals or entities that are not directly involved in a transaction, agreement, or system but use or interact with a product, service, or system nonetheless. They may have permission to access or use something that was primarily created for another party (such as a customer or business). In many cases, third party users are granted specific rights or access based on the terms of an agreement, such as a license or user agreement.
For example, in a software license agreement, a business might have access to a software tool, but its employees (third party users) are also granted the right to use the software under the business's license.
Why are third party users important?
Third party users are important because they can significantly influence the use, success, and operation of a product or service. In many cases, their access is necessary to meet the goals of the original agreement or to ensure that a system operates as intended. For businesses, understanding and managing third party users is crucial for protecting intellectual property, maintaining security, and ensuring that users are complying with licensing or contractual terms.
For example, in cloud computing services, third party users can include contractors or clients who access the system. Properly managing their access and usage is vital to ensure the service’s security and compliance with data protection laws.
Understanding third party users through an example
Imagine a company that provides a cloud-based project management tool to a client. The company’s client (the primary user) has employees who use the tool as part of their daily work activities. These employees are third party users in the context of the contract between the company and the client. While they aren’t part of the primary agreement, they are essential to the usage of the tool and have specific rights to access the service.
In another example, a university offers an online learning platform. The platform is primarily intended for students (the main users), but third party users—such as external guest lecturers or researchers—may also access certain parts of the system to collaborate or view educational materials.
Example of third party users clause
Here’s how a third party users clause might look in an agreement:
“The Licensee may allow third party users to access the software, provided that the Licensee is responsible for ensuring that all third party users comply with the terms of this Agreement. The Licensee must not allow more third party users than those explicitly authorized in this Agreement.”
Conclusion
Third party users are individuals or entities who use a product or service but are not part of the primary agreement. They can play an important role in the success and operation of a product or service, so managing their access and usage is essential for businesses to ensure compliance with legal, contractual, and security requirements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.