Collateral warranty
A separate contract in which you promise a third party, such as a funder or a tenant, that you have met your contract duties.
by Jack Butler-Kettle · About 2 min readShare
Further detail
A collateral warranty creates a contractual relationship with someone outside the original contract, such as a tenant or funder. It may cover design or workmanship duties, assignment and other rights. Its wording can affect the duration and extent of exposure, so it should be read with the subcontract.
Check consistency, liability limits and insurance with appropriate advisers. A Construction contract review before signing can identify commercial differences requiring specialist legal attention.