Collateral Effect
/ˈkɒl·ə·tər·əl ɪˈfekt/
Definitions
- (n.) An indirect or secondary outcome caused by a legal act or decision, not its primary purpose.
The court acknowledged the collateral effect of the ruling on unrelated contracts.
- (n.) A consequence of a security interest affecting assets other than those explicitly pledged as collateral.
The lender's collateral effect extended beyond the pledged property to related business assets.
Forms
- collateral effects
Related terms
Commentary
Collateral effects often require careful analysis to distinguish intended legal consequences from incidental impacts when drafting or interpreting agreements.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.