Description
Book SynopsisSince this book was first published over ten years ago, collateral warranties have been used increasingly by funding institutions, building purchasers and tenants to create a contractual relationship between themselves and other parties involved in the project, whether architect, engineer, contractor or subcontractor. Indeed, collateral warranties are now being used to create primary contractual obligations.
There have been some immensely important developments in the law relating to collateral warranties since the first edition. The Contracts (Rights of Third Parties) Act 1999 has introduced radical new developments into English contract law. The book now includes a completely new chapter on the legislation, which also looks at the potential practical uses of the Act on development projects.
The House of Lords has handed down a number of key decisions recently on third party remedies and on the principles relating to damages on assignment (such
Table of Contents
Preface viii
1 Principle of Law 1
Definition of collateral warranty 1
A comparison of contract and tort 4
Essentials of a contract 5
Form of contract 20
Construing a contract 22
Implied terms 27
Letters of intent 28
2 The Rise of Collateral Warranties 31
Negligence 31
1932 to 1988 33
D & F Estates Limited and Others v. Church Commissioners for England and Others 36
Murphy v. Brentwood District Council 38
1990 to 2000 41
3 Contracts (Rights of Third Parties) Act 1999 47
The background 47
Contracts (Rights of Third Parties) Act 1999 50
Aspects of the Act 56
Using the Act or not using the Act? 59
4 Assignment and Novation 64
Future purchasers and tenants 64
Assignment 64
Prior equities 70
Restrictions on assignment 71
Novation 80
5 Reasonable Skill and Care and Fitness for Purpose 83
Reasonable skill and care 83
Fitness for purpose 88
Dwellings 93
6 Damages and Limitation of Action 94
Damages 94
Expectation interest and reliance expenditure 108
Mitigation and assessment 112
Assignment 117
Contribution and apportionment 125
Limitation of Action 129
7 Developers, Tenants, Purchasers and Funds 134
The position of a developer 134
The position of a tenant 137
The position of a purchaser 143
The position of the funding institution 145
Obligations to enter into collateral warranties 147
JCT enabling clauses 149
8 Insurance Implications 153
Principles of professional indemnity insurance 153
Disclosure of collateral warranties 155
Particular insurance problems 157
Other matters of concern to insurers 161
Policy endorsements for collateral warranties 162
Problems on changing insurers 166
9 Typical terms 167
General considerations 167
Typical terms 174
Contractors and sub-contractors 199
Guarantees of obligations under warranties 200
10 Practical Considerations 201
Does a warranty have to be given? 201
Commercial balance 203
Legal costs and consideration 203
Negotiating and insurance 204
Warranties must be executed 204
The givers, receivers and contents of warranties 205
Standard forms of collateral warranty 207
Commentaries 211
11 Other Solutions: Present and Future 228
Possible solutions – the present 228
Possible solutions – the future 234
Table of Cases 306
Table of Statutes & Statutory Instruments 332
Index 334
