| Commentary

134 Collateral warranties

| Commentary

2: COLLATERAL WARRANTIES

134 Collateral warranties

A third alternative to giving third parties direct rights under the contract or assigning rights under the construction contract, is for the employer to seek to compel the contractor to enter into separate contractual relationships with purchasers, tenants or mortgagees of the completed building1. Such ancillary contracts, known as collateral warranties, are commonly sought not only from contractors but also from all those who make a major contribution to the design or construction of development works2.

Collateral warranties are varied in both form and content, and few standard forms have achieved widespread acceptance3. Most warranties contain

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