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Collateral Warranties - key clauses

Collateral Warranties - key clauses

In basic terms, 3 parties are involved in collateral warranties:

- A contractor

- A beneficiary (third party)

- An employer

Collateral warranties provide a contractual link between a third party (the beneficiary) and a contractor which has carried out certain works or provided certain services for the employer.

So when is it appropriate to use one?

It is often appropriate to expect collateral warranties when:

  • A first purchaser acquires a new build development
  • The employer is the developer and sells the completed site to

What are Collateral Warranties? Explaining the Basics

What are Collateral Warranties? Explaining the Basics

What are collateral warranties?
Collateral warranties are contracts which are designed to establish a contractual link between a third party (the beneficiary) and a contractor or consultant who has carried out certain works.

Why are they required?
In the case of a building contract, collateral warranties are a promise from the contractor to the beneficiary that the works have been carried out in accordance with the building contract. If the works have been carried out negligently, the beneficiary has a right of recourse against the