Construction Law guide to key ancillary agreements (2019) 30 1 Cons.Law 14 [Archived]
Construction Law guide to key ancillary agreements (2019) 30 1 Cons.Law 14 [Archived]

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • Construction Law guide to key ancillary agreements (2019) 30 1 Cons.Law 14 [Archived]
  • Introduction
  • Deed of novation
  • Collateral warranty
  • Performance bond
  • Parent company guarantee
  • Conclusion

ARCHIVED: This Practice Note has been archived and is not maintained.

This article appears as originally published in Construction Law on 1 January 2019.

Hannah Thomas of DLA Piper continues our series of guides to construction law topics with an examination of ancillary agreements. Four key types of ancillary agreements are examined.

Introduction

An ancillary agreement is a contract which is separate from, but related to, a primary contract such as a building contract, subcontract or professional appointment.

There are various types of ancillary agreement that may be required in a construction project, and each serves a different purpose, for example:

  1. to effect the discharge of the original primary contract between Party A and Party B, and to substitute it with a new identical contract between Party B and Party C;

  2. to establish a contractual duty of care between a party to the primary contract and a third party stakeholder with an interest in the project; or

  3. to provide the employer with a remedy from a third party surety if the contractor is in default of its obligations under the primary contract.

This month's guide provides an overview of four key types of ancillary agreement that are commonly entered into between parties in relation to a construction project: (1) deeds of novation, (2) collateral warranties, (3) performance bonds, and (4) parent company guarantees.