A third-party check is a two-party check that is endorsed to a third person. Normally, there are two parties to a check: a payer, who writes the check, and a payee, who receives the check. The payee can take the check to their bank and cash it or deposit it into their account. Meanwhile, funds equal to the amount of the check are drafted from the account of the payer. Third-party checks add another person into the loop. That third person has the right to cash or deposit the check once it's signed over to them
. When someone writes a check to you, you could write that check over to someone else instead of cashing it or depositing it into your account. At that point, it becomes a third-party check
