Collateral Contract
/ˌkɒləˈtɛrəl ˈkɒntrækt/
Definitions
- (n.) A separate contract that exists alongside a main contract, typically providing additional promises that induce a party to enter the main contract.
The court held that a collateral contract existed, supplementing the written agreement between the parties.
Forms
- collateral contracts
Related terms
See also
Commentary
Collateral contracts often arise when one party makes a pre-contractual promise that induces another to enter the main contract; careful drafting should clearly distinguish collateral terms to avoid integration issues.
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