Indispensable party refers to an entity that must be present at a lawsuit so that the court may proceed and make a closing judgment or order to end a controversy.
Suppose that you and your spouse own a property and your neighbor files a case claiming that they have a right to cross your property, but names only you as a defendant. In this case, your spouse becomes an indispensable party. The court may not be able to give the final judgment until your spouse is included in the lawsuit.