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Brief summary of Collateral Warranties

What is a Collateral Warranty?
This is a contract which runs alongside or collateral to a primary or head contract. The parties to the
warranty may be the parties to the primary contract, but it is more usual for the warranty to be between
one of them and a third party.

What is the purpose of a Collateral Warranty?
The purpose of a collateral warranty is to bind, for instance, a designer in contract to a party with
whom he would not otherwise have any contractual relationship. The reason is to provide a legal
remedy where one might not otherwise exist .


Warranties may be requested for the following parties:

Purchaser Collateral warranties may be required where the whole or part of the building
is being sold on. Appropriate warranties will be between the purchaser and
the consultant, contractor and sub-contractors.

Tenants Collateral warranties with tenants may be required for example because of
full repairing leases.

Funders Collateral warranties may be required between the funder and the consultant,
contractor and sub-contractors for as long as the finance is at risk.

Developers There should be no need for collateral warranties between developers and
consultants and contractors as developers should be adequately protected by
the terms of their respective standard contracts . The only exception to this is
that warranties may be required with Sub-Contractors providing design input
Employers Collateral warranties given by a Sub-Contractor Designer in favour of the
Employer are not generally required under WCD 98 as the main contractor
itself has express design responsibility. It is therefore possible to pass design
liability up the contractual chain from the designer to the design/build
contractor and on to the Employer. As there is a contractual chain the value of
a collateral warranty would be limited to those circumstances where a breech
in the contractual chain occurs.

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JCT Collateral Warranties for Main Contractors
Published by RIBAC for JCT for use with JCT 98, WCD 98 and IFC 98

MCWa/F This form is for use where a Warranty is to be given by a Contractor to a
company providing finance (Funder) for a building project.

MCWa/P&T This form is for use where a Warranty is to be given by a Contractor to a
Purchaser or Tennant of a building project.

JCT Collateral Warranties for Sub-Contractors
Published by RIBAC for JCT for use with Nominated and Domestic sub-contracts
under JCT 98, Named and Domestic sub-contracts under IFC 98 and Domestic
sub-contracts under WCD 98.

SCWa/F This form is for use where a Warranty is to be given by a Sub-Contractor
employed pursuant to a JCT Main contract, to a company providing finance
(Funder) for a building project.

SCWa/P&T This form is for use where a Warranty is to be given by a Sub-Contractor
employed pursuant to a JCT Main Contract, to a Purchaser or Tennant
pursuant to a building project.

JCT Collateral Warranties for Trade Contractors
Published by RIBAC for JCT

TCWa/F This form is for use where a Warranty is to be given by a Trade Contractor to
a company providing finance (funder) for a building project let under the JCT
Construction Management Documentation.

TCWa/P&T This form is for use where a Warranty is to be given by the Trade Contractor
to a purchaser or tenant of the whole or part of a project carried out and
completed under the JCT Construction Management Documentation.

Other forms of Warranty to cover design by a Sub-Contractor
Where there is sub-contractor design it is provided for in the JCT Standard forms of Main Contract by
the following documents

NSC/W A Collateral Warranty by a Nominated Sub-Contractor under JCT 98 between
the Nominated Sub-Contractor and the Employer.

Works Contract/3 Under JCT Management Contract 1998 where the Management Contractor
takes responsibility for design by Works Contractors there is a standard form
of Employer/Works Contractor Warranty.

ESA/1 A Collateral Warranty by a Named Sub-Contractor under IFC 98 between the
Named Sub-Contractor and the Employer.



(See also section on JCT Sub-Contracts)

Collateral Warranties for Consultants
Published by the British Property Federation Limited

CoWa/F This form is for use where a Warranty is to be given to a company providing
finance for a proposed development.

CoWa/P&T This form is for use where a Warranty is to be given to a Purchaser or Tenant
of a whole building in a commercial and/or industrial development, or a part of
such a building.

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Pubished by the Construction Industry Council (these forms supersede those issued by the BPF)

CIC/ConsWa/F This form is for use where a Warranty is to be given to a company providing
finance for a proposed development.

CIC/ConsWa/P&T This form is for use where a Warranty is to be given to a Purchaser or Tenant
of a whole building in a commercial and/or industrial development, or a part of
such a building.

Collateral Warranty for use by Housing Associations

NHFA Form of agreement for Collateral Warranty This form is for use where a Warranty is to be
given by someone with design responsibility to the Housing Association on
design and build contracts.

Note: Sources of information
The summaries of documents collated in this document have been abstracted from
various JCT documents and NJCC Guidance Note 6.

For further information see
NJCC Guidance Note 6 Collateral Warranties