Standard form of agreement for use where a collateral warranty is to be given by a consultant to a purchaser or tenant of the whole or part of a commercial, industrial or housing development.
The warranties come in packs of 5, with guidance notes.
ISBN 1 898671 31 1
This form is for use where a collateral warranty ('warranty') is to be given by a consultant to a purchaser or tenant of the whole or part of a building in a commercial or industrial development. A consultant is only under a legal obligation to give a warranty if it agreed to do so in its contract with its Client. The parties should agree the number of warranties to be given to tenants of parts of the development, which should be sensibly limited. By the warranty, the Consultant enters into a contract with the Purchaser/Tenant. In clause 1, the Consultant warrants to the Purchaser/Tenant that it has exercised reasonable skill care and diligence in the performance of its services to the Client under the Appointment. Thus, the Purchaser/Tenant can sue the Consultant in contract if the Consultant is in breach of the warranty. It is therefore important that the extent of those services and the terms under which they are performed are clearly set out in a written appointment document. By clause 2(a) the Consultant's liability is limited to the reasonable costs of repair, renewal and/or reinstatement of any part or parts of the Development; by clause 2(b) is further limited to its 'net contribution', that is, the Consultant should only be liable for its share of the Purchaser's/Tenant's loss, after deducting the amount which it would be just and equitable for other consultants and advisers, contractors and subcontractors to pay, having regard to their share of responsibility for the loss.