Warranties are agreements linked to another “primary” contract. They provide that a duty of care is extended from one of the parties to a third party who is not a party to the original contract. A typical example would be that an architect of a new office development owes a resident a duty of care in development, to the extent that subsequent defects may occur. The legal rules of the contract would prevent any liability between the architect and the user without ancillary warranty. (Although most Architects PI insurers do not allow a collateral confirmation agreement to be accepted and do not insure the architect in this case). The purpose of guarantees and third-party rights is therefore to give third parties a certain certainty for a contract in which they do not participate themselves but in which they have an interest. Section 1(1) of the Third Party of Rights 1999 allows contracting parties to grant a third party the right to enforce a provision of this Treaty: the negotiation, design and agreement of the terms of most third party agreements (real estate or financial) are generally determined by factors more urgent at this stage than the prevention of conflicts between their final terms and those of a construction contract. As simple construction lawyers, we will be involved much later in the process or where the contractor may not have been involved. In fact, the lease, modification license or financing agreement are therefore often presented to the contractor as a fait accompli – it is “what it is”. There is no room for manoeuvre and the owner/funder does not accept anything else. From the employer`s point of view (z.B.
the tenant or borrower) does not wish to be exposed to risk because it has agreed to something “on the line”, but it cannot cause the contractor to reflect the same obligations “on the line”. Therefore, the employer will simply want the contractor to assume all its obligations (to the extent that they relate to the work) in order to avoid any potential shortcomings. But wait a minute – just because the employer agreed on something in the series (to get his lease or to be able to use funds) why would the contractor keep the baby? A warranty guarantee for a buyer or tenant of a commercial real estate development typically has certain essential features, many of which are common in all sectors of construction and engineering. In addition, the mere financial participation in the construction project does not make an investor a third-party beneficiary. To Windwood Development, LLC v. Pelley,14 Pelley was an investor in a residential construction project. Pelley also had a contract with the developers to build the causeway, assault canal, sanitary canal and water pipe for the subdivision. At the same time, developer Abonmarche Consultants commissioned the project.
After the sewer lines built by Pelley failed the municipal inspection, the developer was forced to commission another contractor with the necessary repairs. The developer then withheld payment and filed a lawsuit against Pelley for infringement. Pelley brought a third action against Abonmarche for infringement/quasi-contract and as a third party beneficiary. Pelley claimed that as an investor in the project, he was a third-party beneficiary of the contract between Abonmarche and the developer. Pelley argued that Abonmarche did not have the site inspected, delaying inspections resulting in avoidable additional costs and that, therefore, all damage suffered by the developer was due to Abonmarche`s actions. . . .