Collateral Warranty – What do you need to know?

15th Jul 2021 | Building Consultancy

Primmer Olds B.A.S’ Building Surveyor, Adam Stubbings provided some in house CPD (Continuing Professional Development) training for our fee earners. Adam gave our team knowledge and insights on what you need to know about collateral warranty (third party rights).

So, what is a warranty? An assurance or promise in a contract, the breach of which may give rise to a claim for damages. It is essentially a minor term of a contract. Privity of contract is important to know; as it is the reason collateral warrantees exist.

It simply means that those parties to a contract are the only parties bound by it. This is unless other (third) parties are expressly framed within the contract. Without such a contractual link, a third party is very unlikely to have any successful right of legal recourse against the party which was responsible for a defect in the design and/or construction of the project (whether in contract or tort).

A collateral warranty, therefore, creates a duty and set of rights in contract in favour of the interested third party, which would not otherwise have existed because of the doctrine of privity of contract.

To find out more information, please do not hesitate to contact Adam Stubbings on 023 8022 92 or any of our building surveyors at Primmer Olds B.A.S.


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