collateral warranty

A collateral warranty is a legal agreement that provides additional assurance to a party, often a funder or investor, that certain obligations—like quality, deadlines, or standards—are met by the main contractor or developer. It is similar to a guarantee but is usually independent and runs alongside the main contract. This warranty ensures that if the primary contractor fails to fulfill their responsibilities, the third party can seek recourse directly from them, offering added security and clarity for all parties involved in a construction or development project.