Collateral warranty or collateral contract

The meaning of this term differs depending on the context in which it is used:

  • In the general law of contract, a term or contract which runs outside the main written contractual agreement between the parties.

  • In construction law, collateral warranty refers specifically to a contract between a professional consultant, building contractor or sub-contractor and a third party (for example, a funder, tenant or buyer).  It is an agreement under which a professional consultant, building contractor or sub-contractor generally warrants to a third party that it has complied with its appointment, building contract or sub-contract.

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