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- Dictionarycollateral contract
noun
- 1. a subsidiary contract which induces a person to enter into a main contract or which depends upon the main contract for its existence.
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Sep 23, 2021 · A collateral contract defined as a contract where the parties to one contract enter into or promise to enter into another contract. It is a promise which is not a term of contract. However, if without the main contract, it properly would not be existed.
Feb 1, 2023 · Collateral contracts are independent oral or written contracts that are made between two parties to a separate agreement or between one of the original parties and a third party. This type of contract is usually made before or simultaneously with the original contract.
A collateral contract with three or more parties obligates each of the contracting parties to meet their individual accountability to each other party. Called also collateral warranty.
A collateral contract is usually a single term contract, made in consideration of the party for whose benefit the contract operates agreeing to enter into the principal or main contract, which sets out additional terms relating to the same subject matter as the main contract.
Collateral contracts are formed concurrently with the main contract. They are usually precipitated by statements or assurances given by one party, aiming to induce the other into entering the main contract.
Apr 21, 2020 · Collateral contracts are contracts that are additional to, or build on top of an original, main contract. A plaintiff will often argue that a collateral contract exists where they have relied on a statement or document not part of the legally binding contract and wish to enforce it.
Jun 20, 2024 · A collateral contract is a separate contract that builds on the main contract. It may appear verbally or written as a smaller agreement, but does not form one of the terms of the main agreement. You must satisfy the prerequisite elements to demonstrate a collateral contract exists.
Discover the meaning of Collateral contract and explore detailed examples that illustrate how it's used in real world contracts. Learn more with our comprehenesive terminology guide
Glossary. Collateral contract. A contract, for which the consideration is the entering into of another contract. A person's promise or representation might not form a term of a main contract, but it can still be treated as a binding collateral contract where: The person making the promise or representation intended it to be legally binding.
Dec 14, 2022 · A contract, for which the consideration is the entering into of another contract. A person's promise or representation might not form a term of a main contract, but it can still be treated by the courts as a binding collateral contract where: The person making the promise or representation intended it to be legally binding.
