Collateral contracts and warranties can create enforceable third-party obligations alongside a principal contract.

Collateral contracts and collateral warranties arise where a third party's assurance accompanies a principal contract and creates independent obligations enforceable by or against that third party. To be treated as a collateral contractual term or warranty courts require contractual intention and consideration. Manufacturer guarantees given with a dealer's sale exemplify collateral contracts between manufacturer and purchaser. Statutory consumer guarantees may impose independent obligations irrespective of collateral-contract formalities; otherwise consideration remains essential. Examples include card-issuer payment undertakings and dealer representations enforceable against dealers in hire-purchase sales.

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