From my understanding, Collateral Warranty are provided by the professional bodies and contractor to the funder/ owner and or lessee/ purchaser then the contractor will pass down the obligation to those of his subcontractors who may be required to provide a collateral warranty.
Construction Management Trade Contractor Collateral Warranty for a Funder &
Construction Management Trade Contractor Collateral Warranty for a Purchaser or
Tenant
but not much info, just a lot of adver to sell the form
In a contract where say the contractor design protion is used, what about the warranty here?
Say sometimes you see the Architect wanted the roof to be carried out by the sub contractor inclusive of the design. The main contractor go to the sub contractor & basically give them the drawings(elevations & plans), BoQ and brief on what is needed.
Thanks
Member for
19 years
Member for19 years
Submitted by Rodel Marasigan on Thu, 2007-03-08 20:29
“Why is a lessee able to claim against the contractor?”
Under JCT there are two forms for Collateral warranty.
a) Contractor Collateral Warranty for a Funder/ Owner
b) Contractor Collateral Warranty for a Purchaser or Tenant
I believed reference books are available in any of these.
Ex: Owner has entered into an agreement with a contractor to develop that site - as offices, with the usual facilities including car parking. If the owner is prudent he will have already made an arrangement with someone to lease the premises once they are complete. The lease, as is usual these days, would be fully repairing/ insuring. But if any part of the building is defective, how can the lessee - who is agreeing to take a new, untested building on a fully repairing lease - have a claim against either the contractor and/or any of the professional team involved in the construction?
This is where the collateral warranty protects the lessee. The lessee should request, as a minimum, collateral warranties from the contractor and professional team involved in the construction of the building even though they don’t have any direct contact to the contractor or professional team. Depending on the nature of the Joint Contracts Tribunal (JCT) building contract being entered into, the owner would also be advised to require collateral warranties from the professional team.
As I have mention that it should be a requirement at the time of the execution of the JCT (no matter which type) that the professional team involved agree to enter into collateral warranties with the owner (if need be) and the proposed lessee of the new building.
“Can someone provide a list of checkpoint for warranty?”
There are many references like:
“Construction Management Trade Contractor Collateral Warranty for a Funder” - where the Trade Contractor is to give a warranty to a company providing finance for a building project and the contract for the building works is the Construction Management Trade Contract.
“Construction Management Trade Contractor Collateral Warranty for a Purchaser or
Tenant” - where the Trade Contractor is to give a warranty to a Purchaser or Tenant in respect of building works and the contract for the building works is the Construction Management Trade Contract.
“Are there a different between Collateral warranty and product warranty?”
The simple answer is YES! regarding to specific term.
Product – can be replaced as a whole or repair and also refer to a promise without any collateral to withhold.
Collateral - traditionally refer to secured lending (also known as asset-based lending). – in finance means a security or guarantee.
"Collateral warranties, therefore, provide for the lessee/owner to be able to claim against the contractor."
Why is a lessee able to claim against the contractor?
I thought the JCT Contract or any Construction Contract is a contract between two parties ie The "Employer" & the "Contractor", even the Architect, QS, Structural Engineer or the M&E Engineer have no Contract with the contractor.
Can someone provide a list of checkpoint for warranty?
Say, if my Director(Contractor)ask me tomorrow to check that a warranty in a contract we are about to enter& brief him on the Risks, what should I look out for? In what circumstances, we can be liable & which are blatantly not valid?
Are there a different between Collateral warranty and product warranty?
Very much like to know, Thanks
Member for
19 years
Member for19 years
Submitted by Rodel Marasigan on Wed, 2007-03-07 18:59
Contractor Collateral Warranty is where the Contractor is to give a warranty to a company providing finance for a building project and the contract for the building works is the Standard Building Contract, Intermediate Building Contract or Design and Build Contract.
Collateral warranties, therefore, provide for the lessee/owner to be able to claim against the contractor. It should be a requirement at the time of the execution of the JCT (no matter which type) that the professional team involved agree to enter into collateral warranties with the owner (if need be) and the proposed lessee of the new building. This then allows the owner/lessee to bring an action against the contractor and any member of the professional team for any defects that may occur in the premises caused through the fault or negligence of that particular person. Collateral warranties are sometimes known as duty of care deeds.
Member for
19 yearsRE: Warranty in a construction contract, the pros & cons
Hi Skan,
What do you mean by material warranty? Is it defective materials that has been used on waterproofing or the work to do the waterproofing?
If products defects supplied by MC to SC that’s a different issue and if proven that should not covered by collateral warranty on my own thought.
If proven a NCR should be raised.
Regards,
Rodel
Member for
19 years 5 monthsRE: Warranty in a construction contract, the pros & cons
Hi,
Anyone had any experience with warranty?
Materials warranty to client from sub contractor.. say waterproofing.. what are the implication from SC to MC and MC to client?
Colleteral warranty: any experiences that can share with us? I have not deal with warranty before but would like to know more from basic.
Warranty same as latent defects?
Member for
19 yearsRE: Warranty in a construction contract, the pros & cons
Hi Scan,
From my understanding, Collateral Warranty are provided by the professional bodies and contractor to the funder/ owner and or lessee/ purchaser then the contractor will pass down the obligation to those of his subcontractors who may be required to provide a collateral warranty.
Member for
19 years 5 monthsRE: Warranty in a construction contract, the pros & cons
Hi Rodel,
Thanks
I searched in google for the
Construction Management Trade Contractor Collateral Warranty for a Funder &
Construction Management Trade Contractor Collateral Warranty for a Purchaser or
Tenant
but not much info, just a lot of adver to sell the form
In a contract where say the contractor design protion is used, what about the warranty here?
Say sometimes you see the Architect wanted the roof to be carried out by the sub contractor inclusive of the design. The main contractor go to the sub contractor & basically give them the drawings(elevations & plans), BoQ and brief on what is needed.
Thanks
Member for
19 yearsRE: Warranty in a construction contract, the pros & cons
Hi Scan,
“Why is a lessee able to claim against the contractor?”
Under JCT there are two forms for Collateral warranty.
a) Contractor Collateral Warranty for a Funder/ Owner
b) Contractor Collateral Warranty for a Purchaser or Tenant
I believed reference books are available in any of these.
Ex: Owner has entered into an agreement with a contractor to develop that site - as offices, with the usual facilities including car parking. If the owner is prudent he will have already made an arrangement with someone to lease the premises once they are complete. The lease, as is usual these days, would be fully repairing/ insuring. But if any part of the building is defective, how can the lessee - who is agreeing to take a new, untested building on a fully repairing lease - have a claim against either the contractor and/or any of the professional team involved in the construction?
This is where the collateral warranty protects the lessee. The lessee should request, as a minimum, collateral warranties from the contractor and professional team involved in the construction of the building even though they don’t have any direct contact to the contractor or professional team. Depending on the nature of the Joint Contracts Tribunal (JCT) building contract being entered into, the owner would also be advised to require collateral warranties from the professional team.
As I have mention that it should be a requirement at the time of the execution of the JCT (no matter which type) that the professional team involved agree to enter into collateral warranties with the owner (if need be) and the proposed lessee of the new building.
“Can someone provide a list of checkpoint for warranty?”
There are many references like:
“Construction Management Trade Contractor Collateral Warranty for a Funder” - where the Trade Contractor is to give a warranty to a company providing finance for a building project and the contract for the building works is the Construction Management Trade Contract.
“Construction Management Trade Contractor Collateral Warranty for a Purchaser or
Tenant” - where the Trade Contractor is to give a warranty to a Purchaser or Tenant in respect of building works and the contract for the building works is the Construction Management Trade Contract.
“Are there a different between Collateral warranty and product warranty?”
The simple answer is YES! regarding to specific term.
Product – can be replaced as a whole or repair and also refer to a promise without any collateral to withhold.
Collateral - traditionally refer to secured lending (also known as asset-based lending). – in finance means a security or guarantee.
Regards,
Rodel
Member for
19 years 5 monthsRE: Warranty in a construction contract, the pros & cons
Hi,
"Collateral warranties, therefore, provide for the lessee/owner to be able to claim against the contractor."
Why is a lessee able to claim against the contractor?
I thought the JCT Contract or any Construction Contract is a contract between two parties ie The "Employer" & the "Contractor", even the Architect, QS, Structural Engineer or the M&E Engineer have no Contract with the contractor.
Can someone provide a list of checkpoint for warranty?
Say, if my Director(Contractor)ask me tomorrow to check that a warranty in a contract we are about to enter& brief him on the Risks, what should I look out for? In what circumstances, we can be liable & which are blatantly not valid?
Are there a different between Collateral warranty and product warranty?
Very much like to know, Thanks
Member for
19 yearsRE: Warranty in a construction contract, the pros & cons
Hi Scan,
Contractor Collateral Warranty is where the Contractor is to give a warranty to a company providing finance for a building project and the contract for the building works is the Standard Building Contract, Intermediate Building Contract or Design and Build Contract.
Collateral warranties, therefore, provide for the lessee/owner to be able to claim against the contractor. It should be a requirement at the time of the execution of the JCT (no matter which type) that the professional team involved agree to enter into collateral warranties with the owner (if need be) and the proposed lessee of the new building. This then allows the owner/lessee to bring an action against the contractor and any member of the professional team for any defects that may occur in the premises caused through the fault or negligence of that particular person. Collateral warranties are sometimes known as duty of care deeds.
Regards,
Rodel