There are many different types of business transactions that can take place in Washington State. Among them is the third-party transaction. As a business person, it is important to understand what this is and the laws that might apply to you.
Third-party transactions in Washington State
A third-party transaction is a business transaction between two parties where a middleman is involved in facilitating the transaction. This can happen in several different ways, but typically, the third party is either acting as an intermediary or guaranteeing payment.
From the definition, third-party business transactions can be grouped into two, i.e., intermediary or guaranteeing payment. An intermediary transaction is where the third-party acts as an agent or facilitates communication between two parties in making a deal. For example, a real estate agent or a law firm.
On the other hand, a payment guaranteeing transaction happens when the third party extends credit to their customers. For example, let’s say you’re a customer at a store and you make a purchase using your credit card. Under those circumstances, the credit card company (the third party) guarantees payment to the store. If you don’t pay your credit card bill, the credit card company will be responsible for paying the store for your purchase.
Laws and regulations that govern third-party transactions in Washington State
The first one is the Uniform Commercial Code (UCC). The UCC provides guidelines and rules for how business transactions should be conducted. It also establishes legal rights and responsibilities for all parties involved in a transaction.
The second law is the Third-Party Payment Act. This act protects businesses from being liable for payments made by someone else. For example, if you make a purchase using a credit card, the credit card company is responsible for ensuring that the funds are available to cover the purchase.
Generally, whenever there’s some sort of intermediary between a buyer and seller, including online platforms like PayPal, that activity is known as a third-party transaction. They are made to make lives easier and to protect the interest of the two parties transacting.