A collateral warranty is an ancillary document that supports a primary construction contract involving an agreement with a third party. At times, a contractor or architect needs to warrant that he has taken care of the duties outlined in the contract that established the work order.Continue Reading
Many times collateral warranties come with obligations that have an influence on the contractor or consultant, such as setting requirements for materials or for the quality level of a finished job, expecting it to be finished at a particular level of quality. A collateral warranty can invoke third-party contractual rights that allow for claims regarding losses that, without the warranty, would not be recoverable. Third-party rights permit people or entities, not parties to a contract, to enforce that contract.
Some types of collateral warranty are somewhat weaker in their construction, referring to a fairly ambiguous "duty of care" or other obligation under the building contract or subcontract. Collateral warranties exist for three reasons: they continue providing security for the construction, tort claims have only mixed results in court and privity of contracts keeps third parties from having to depend on the contracts of other people. Without collateral warranties, entering into construction contracts represents a significant risk on the part of the client.Learn more about Law
A purchase agreement, which is a legal document that explains the terms regarding the sale and purchase of goods, should contain all relevant information, including details about the buyer and seller, such as names, contact numbers and addresses; contact details of witnesses or co-signers, if any; and the kind, price and quantities of products being sold, explains LegalMatch. It also defines the conditions for delivery and shipping and the possibility of revising the agreement in the future.Full Answer >
A stipulated judgment is when both parties in civil court case agree to settle their dispute, and the judge signs a legal document reflecting the parties’ agreement. A stipulated judgment is also called a consent decree or a consent judgment.Full Answer >
Among the top items parties should agree upon in a construction contract are the scope of the work, indemnification, warranties and bonds, change order provisions and responsibility for delays, according to the American Bar Association. All these items are subject to negotiation between the parties involved, and the obligations should be expressed clearly.Full Answer >
All builders who perform work under contract provide a basic warranty, either orally expressed or written into the construction contract. A warranty ensures the owner's recourse if builder does not fulfill the contract terms.Full Answer >