Collateral Warranty

A contract by which a party (e.g. a subcontractor, designer, or contractor) gives direct rights to a third party (e.g. the building owner, tenant, or funder) who has no direct contractual relationship with them. Collateral warranties are common on larger projects; for domestic extensions they are less usual, though a homeowner might request a warranty directly from a specialist subcontractor such as the waterproofing contractor on a basement.