Collateral Warranties And Third Party Rights

There are various legal factors that have to be considered when it comes to collateral warranties and third party rights in construction contracts. It is therefore advisable to make sure you have an experienced law firm on your side to ensure you are covered in every area. At Blackstone Solicitors, we are able to advise many different types of client, no matter the complexity of the circumstances of these rights and warranties.

For more information about how our team of construction solicitors can help you, contact us on 0345 901 0445 or complete our online enquiry form and a member of the team will call you back at a convenient time.

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How we can help

A collateral warranty is a contract under which a professional consultant, a building contractor or a sub-contractor warrants to a third party that it has complied with its professional appointment, building contract or sub-contract. However, some forms of collateral warranty only refer to a “duty of care” or selected obligations under the professional appointment, building contract or sub-contract. These offer less protection.

A third party right is the right of a person who is not a party to a contract (a third party) to enforce the benefit of a term of that contract. Usually, a construction contract states that a third party cannot rely on the Contracts unless the contract expressly grants third party rights. Usually, a construction contract that uses third party rights sets them out in a schedule to the building contract or professional appointment.

We are here to advise upon collateral warranties and third party rights concerning construction projects of any size. Be it a single local plot or a site on a much larger scale, we will work with you to make sure everything goes to plan.

Friendly yet direct, our team is passionate about every case we take on, and we believe the entire process requires constant communication. We will therefore guide you through the technicalities involved, offering expert advice from start to finish.

Why legal help is important

A construction project requires collateral warranties or third party rights for three main reasons:

Privity of contract prevents third parties relying on other people’s contracts.

They provide construction security.

A claim in tort is unlikely to succeed. The law of tort in England and Wales does not generally allow a claim for pure economic loss, such as damage caused to a building by a defect in that building. It is necessary to have a contract in place.

While the circumstances and conditions will vary from contract to contract, an employer normally asks its professional consultants and the contractor to agree to provide collateral warranties or third party rights to parties funding the scheme, any purchasers and also tenants. An employer may also require its contractor to obtain collateral warranties from all the contractor’s sub-contractors or selected key sub-contractors.

In terms of the difference between collateral warranties and step in rights, both will offer some form of security and protection for the project. Collateral warranties have historically been more popular and it may be easy to grant step-in rights.

Our Services

Our team prides itself on being able to meet every need of each of our clients. We are willing to go the extra mile when other firms are not, ensuring our clients are given the very best opportunity of getting the outcome they are after. Get in touch to see how our specialist team can help and advise you with collateral warranties and third party rights.

Contact us

Speaking to one of our solicitors is easy, simply call us on 0345 901 0445 or allow us to get in touch with you by filling in our online enquiry form. Our services are available to clients throughout the UK, including Manchester, London, Cheshire and Chester, as well as to those living abroad.


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