Collateral warranty: under the spotlight

victoria peckett 2017 bw

Victoria Peckett draws lessons from two recent cases on the defences available against claims under collateral warranties

The terms of collateral warranties have come under the spotlight again – this time looking at defences available against claims brought under them. Generally the principle is accepted that the giver of a warranty should have no greater liability to the beneficiary than it would have had to the client under the original appointment or building contract to which the warranty relates. A variety of clauses have been inserted into warranties to achieve that principle. But quite what the principle means in practice depends on both the drafting of the clause in question and the law governing the warranty – as illustrated by a couple of recent cases.

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