Q&As

Can you delete professional indemnity provisions in a collateral warranty where the contractor has not undertaken any design work?

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Produced in partnership with David Sawtell of 39 Essex Chambers
Published on LexisPSL on 07/12/2017

The following Construction Q&A produced in partnership with David Sawtell of 39 Essex Chambers provides comprehensive and up to date legal information covering:

  • Can you delete professional indemnity provisions in a collateral warranty where the contractor has not undertaken any design work?

Can you delete professional indemnity provisions in a collateral warranty where the contractor has not undertaken any design work?

A collateral warranty is an agreement that is ancillary to the primary contract. The purpose of a collateral warranty is to ensure that a party that would not otherwise be in a direct contractual nexus with the entity that is carrying out works (such as, for example, design works or building works) does have a direct contractual claim without having to rely on the Contracts (Rights of Third Parties) Act 1999. They became more prominent in the construction industry following the rejection of the approach to tortious liability in Anns v Merton London Borough Council in D&F Estates v Church Commissioners and Murphy v Brentwood District Council, which made it much more difficult to bring a claim in negligence for defective building work. For more information, see Collateral warranties—overview.

The question does not specify the form of contract in the primary contract or if a standard form collateral warranty is being used. There are a number of standard form collateral warranties but it is not unusual for parties to enter into bespoke collateral warranties. They may be requested by the ultimate end user or occupier, such as the freehold purchaser or tenant, or even by a lender. Additionally, an employer may seek collateral

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