- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 25 Jul 2018
The term 'warranty' can have a number of meanings, but in general, it refers to a legally binding assurance or promise.
Warranties may be used to provide assurance from one party to another that goods and/or services will meet certain expectations, e.g. fit for purpose, being free from defects, complying with statutory and other regulations and specifications.
A warranty can be either express (i.e. written) or implied.
A common form of warranty, and one that is paid for, is that which runs with a product, meaning that the customer of a product is given an assurance by the manufacturer that any defects or losses will be repaired or compensated during a given period. The warranty can also detail both parties’ rights and obligations in the event of a dispute.
Defects in buildings are not recoverable in tort (only as a contractual claim), as they are economic loss which are only recoverable through a contractual relationship. As a result, collateral warranties have been developed. These provide for a duty of care to be extended by one of the contracting parties to a third party who is not party to the original contract.
A typical example is an architect of a new development agreeing to a duty of care to the occupant. Privity of contract rules would prevent any liability arising between the architect and occupier without the existence of a collateral warranty.
Other forms of assurance that might be referred to on construction projects include:
- Fitness for purpose.
- Reasonable skill and care.
- Workmanlike manner.
- Good faith.
- Reasonable endeavours.
- Best endeavours.
- Duty of care.
 Find out more
 Related articles on Designing Buildings Wiki
- Bonds v guarantees.
- Breach of contract.
- Collateral warranties.
- Definition of collateral warranty.
- Difference between collateral warranties and third party rights.
- Fit for purpose.
- Miller Act.
- Performance bond.
- Practical considerations of collateral warranties.
- Reasonable skill and care.
- Terms and conditions.
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