15 Collateral Warranties_TP Rights

Question 1

What is a collateral warranty?

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Question 2

Who might want a collateral warranty and who are the parties to the warranty?

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Question 3

What are the advantages of using collateral warranties?

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Question 4

What are the disadvantages of using collateral warranties?

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Question 5

What different collateral warranties are you aware of?

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Question 6

Outline some of the typical clauses you would expect to see in a collateral warranty.

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Question 7

What clauses limiting the liability of the warrantor would you expect to find in a collateral warranty?

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Question 8

What is a net contribution clause?

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Question 9

Give an example of how the absence of a net contribution clause within an appointment may be a business risk?

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Question 10

What are step-in rights?

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Question 11

Does a warrantor have to take instruction from the third party?

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Question 12

How many assignments are usually permitted by a collateral warranty?

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Question 13

Explain to your client what rights and obligations he will typically have as a third party under a collateral warranty.

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Question 14

Give an example of where collateral warranties have been used on one of your projects.

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Question 15

What are reliance letters?

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Question 16

How do reliance letters differ from collateral warranties?

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Question 17

Are reliance letters contractually binding?

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Question 18

What can one do if the information within a reliance letter happens to be wrong?

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Question 19

What information typically goes into a reliance letter?

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Question 20

What is the significance of the Contract (Rights of Third Parties) Act?

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Question 21

What is the difference between collateral warranties and rights under the Contracts (Rights of Third Parties) Act?

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Question 22

Does the Contracts (Rights of Third Parties) Act apply to consultant appointments?

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Question 23

What are the advantages of using the Contract (Rights of Third Parties) Act?

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Question 24

What are the disadvantages of using the Contract (Rights of Third Parties) Act?

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Question 25

Which of the standard forms of contract make reference to the Contracts (Rights of Third Parties) Act?

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Question 26

How is a third party given rights in a contract under the Contracts (Rights of Third Parties) Act?

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Question 27

Does the use of a collateral warranty automatically exclude the Contracts (Rights of Third Parties) Act from a contract?

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Question 28

If a third party is not named in the contract, do they still have any rights as a result of the Contracts (Rights of Third Parties) Act?

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Question 29

Explain how the Contracts (Rights of Third Parties) Act has been used on one of your projects.

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Question 30

A developer is about to enter into a design and build contract on a project to build and sell an office block. What advice would you give him in respect of warranties?

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Question 31

A funder has a collateral warranty in respect of the main contract on a project. The employer on the project goes into liquidation. What is the funder?s likely position?

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Question 32

Your client is building a new sewage treatment works using design and build procurement. He is unsure if he should be requesting collateral warranties from any of the sub-contractors on the project. Give him some advice.

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Question 33

Your client is not sure whether or not to use collateral warranties or to rely on the Contracts (Rights of Third Parties) Act. Give him some advice.

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