UKTC Archive

RE: Collateral warrenty for a contractor?

Subject: RE: Collateral warrenty for a contractor?
From: Howe, Ron
Date: Jan 29 2019 13:22:28
What is a Collateral Warranty?

"A collateral warranty is a contract under which a construction professional, 
contractor or sub-contractor promises to a third party (the "beneficiary") 
that it has complied with the requirements of its professional appointment, 
contract or sub-contract.  For example, a sub-contractor may provide a 
collateral warranty to the project's ultimate employer and / or its funder by 
which it promises it has completed its works in accordance with its 
sub-contract.

A collateral warranty has all the requirements and manifestations of an 
ordinary contract.  It gives the beneficiary a direct contractual 
relationship with the party providing it (the "warrantor"), which would 
otherwise not have existed.  In the scenario above, the Employer is the 
beneficiary and the Sub-Contractor is the warrantor. "

Ron Howe
Tree Officer (Planning)
Mole Valley District Council
Tel. 01306 XXX XXX

-----Original Message-----
From: uktc-request@xxxxxx.tree-care.info 
[mailto:uktc-request@xxxxxx.tree-care.info] On Behalf Of Bettina Broadway-Mann
Sent: 29 January 2019 13:03
To: UK Tree Care
Subject: Collateral warrenty for a contractor?

Hello all,
I have had a rather strange request come in in relation to a BS5837 survey
I did last year - copied below -

Your report has been included in their contract and they are concerned that
they are relying on your PI insurance for the report. They asked if you
could provide a collateral warranty. I have spoken to our solicitors who
have said that a collateral warranty can be provided if you agreed to this,
otherwise a letter of reliance in favour of the contractor would be
acceptable to the contractor.


I'm not really sure what they are asking, but shouldn't they have their own
insurances to cover whatever it is that they are worried about?


And as far as I know, surely my insurance would only cover me anyway?


Any thoughts appreciated.


regards

Bettina



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