Collateral contracts and collateral warranties

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uarantee" in the name of the manufacturer. Here the main contract of sale is between the customer and the dealer but it seems that the "guarantee" could also be regarded as a collateral contract between the manufacturer and customer. Special legislation applies to certain guarantees given to consumers in respect of goods sold or supplied to them. Where the requirements specified in the legislation....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....plied to impose obligations on persons not parties to the main contract. [Source: Pollock and Mulla - The Indian Contract Act]. (iii) Where a preliminary statement or assurance is not a term of the principal agreement, the Courts may deem it as a contract or warranty, collateral to the principal agreement. Where a necessary contractual intention is present, the Courts would treat or would constr....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....To be enforceable as a collateral contract, a promise must be supported by consideration. * (i) In the case of purchase of goods by the customer from the dealer for consideration, the guarantee from the manufacturer is collateral contract between the manufacturer and the customer. * (ii) When a customer buys goods from a shop and the payment involves use of cheque, cards or credit ca....