Collateral Warranties Explained

A collateral warranty is a contract which runs parallel, and is usually supplemental to, another contract. Usually the purpose of a collateral warranty is to create a contractual relationship between two parties where none would otherwise exist. It takes the form of a contract between the party to the underlying contract who is providing services or carrying out work and a third-party who has an interest in the proper performance of that underlying contract and, just like any contract it must be signed by the Parties to the agreement. The party giving the collateral warranty is referred to as ‘the warrantor’ and the party to whom it is referred to as ‘the beneficiary’……. more

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