Document background
The Collateral Warranty Agreement serves as a crucial legal instrument in the Philippine business environment, particularly in construction and development projects. It is typically used when third parties, such as purchasers, tenants, or funders, require direct contractual rights against contractors, consultants, or suppliers who are not their immediate contracting partners. The document includes specific warranties, security arrangements, and enforcement mechanisms, all structured to comply with Philippine legal requirements including the Civil Code, Personal Property Security Act, and relevant property laws. The agreement becomes especially important in large-scale projects where multiple stakeholders need protection beyond the primary contract, providing them with direct recourse in case of defects, failures, or breaches of warranty obligations.
