Collateral Warranty

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Collateral Warranty

In real estate transactions, an assurance or guaranty of title made by the holder of the title to the person to whom the property is conveyed.

Such a Warranty is not the same as a Covenant running with the land, since it runs only to a particular convenantee who accepts the land from the holder of title and not to each successive owner of the land upon taking ownership of it.

COLLATERAL WARRANTY, contracts, descent. Where the heir's title to the land neither was, nor could have been, derived from the warranting ancestor; and yet barred the heir from ever claiming the land, and also imposed upon him the same obligation of giving the warrantee other lands, in case of eviction, as if the warranty were lineal, provided the heir had assets. 4 Cruise, Real Prop. 436.
     2. The doctrine of collateral warranty, is, according to Justice Story, one of the most unjust, oppressive and indefensible, in the whole range of the common law. 1 Sumn. R. 262.
     3. By the statute of 4 & 5 Anne, c. 16, Sec. 21, all collateral warranties of any land to be made after a certain day, by any ancestor who has no estate of inheritance in possession in the same, were made void against the heir. This Statute has been reenacted in New. York; 4 Kent, Com. 460, 3d ed.; and in New Jersey. 3 Halst. R. 106. It has been adopted and is in force in Rhode Island; 1 Sumn. R. 235; and in Delaware. Harring. R. 50. In Kentucky and Virginia, it seems that collateral warranty binds the heir to the extent of assets descended. 1 Dana, R. 59. In Pennsylvania, collateral warranty of the ancestor, with sufficient real assets descending to the heirs, bars them from recovering the lands warranted. 4 Dall. R. 168; 2 Yeates, R. 509; 9 S. & R. 275. See 1 Sumn. 262; 3 Halst. 106; Harring. 50; 3 Rand. 549; 9 S. & R. 275; 4 Dall. 168; 2 Yeates, 509; 1 Dana, 50.

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Deposits and Guarantees required: As stated in the tender documents, a performance bond or guarantee and/or a parent company guarantee and a collateral warranty may be required.
A collateral warranty is used as a supporting document to a primary contract, and contains obligations that affect the consultant or contractor, such as using materials of an appropriate quality or carrying out work in a professional, workmanlike manner.
This led the judge to state that: " this Collateral Warranty is clearly one "for the carrying out of construction operations by others"".
Date of collateral warranty provision must remain throughout the warranty period and the date of entry into the contract vegteljesE[degrees]tesenek.
Developers usually have agreed a contractual relationship with the contractor, but will require a collateral warranty if they have not.
Deposits and Guarantees required: The contracting authority reserves the right to request a collateral warranty, deposits, guarantees or other forms of security.
A collateral warranty establishes a contractual chain of liability which extends protection to third parties.
The successful bidder will be required to enter into a maintenance contract directly with the Council and also a collateral warranty for the provision of the equipment.
Collateral contents The basic contents of a collateral warranty are: Duty of care Deleterious materials.
A collateral warranty creates a direct contractual link between parties who would not otherwise have a contract, such as a tenant of a property and the architect who designed the project.
A performance bond or guarantee/or a parent company guarantee and a collateral warranty may be required.
Developers usually have agreed contractual relationships with consultants and contractors, but anyone else who is adversely affected by poor design or workmanship will require a collateral warranty.