Collateral Warranties and Third-Party Rights Specialist collateral warranties and third-party rights solicitors in Milton Keynes

This is generally secured by way of collateral warranties or by recognising third party rights. A requirement to give these rights are often hidden in the small print of a contract, so by the time the documents are issued, the party having to sign up cannot negotiate them.

At Heald Solicitors in Milton Keynes, our construction team can draw up or negotiate collateral warranties on your behalf. These will give someone who is not a party to the contract the rights they need to bring legal action for remedies where necessary. It will also ensure that the contractor is able to insist on the issue of warranties when needed. This means that the party giving the warranty is able to comply with its legal obligations, liaising where necessary with that party’s professional indemnity insurers.

Collateral Warranties

Collateral warranties in development projects allow those involved in the construction such as building contractors, sub-contractors or architects and engineers, to provide a warranty to a third party that they have met their obligations under the terms of a contract or professional appointment. While the third party will not be a signatory to the original contract, the collateral warranty gives them the right to bring a claim against the contractor or other professional, should they fall short of their agreed services.

Making sure that the terms of the warranty are workable – and are covered by the relevant professional indemnity insurance is vital. As well as acting for banks, our team provides advice for those giving the warranties to ensure that the terms are acceptable and achievable.

Third-party rights

Third-party rights can be used where a collateral warranty will not be issued. They allow someone who is not a signatory to a contract to enforce the benefit of a term contained in the contract. A contract will usually specify that third parties cannot rely on any rights except those specifically set out in the agreement and become effective by the issue of a third-party rights notice.