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Legal Terms - collateral contract
A subsidiary contract that induces a person to enter into a main contract. For instance, if X consents to purchase goods from Y that are made by Z and does so based on Z's guarantee of the high quality of the goods, then X and Z might be deemed to have made a collateral contract that consists of Z's quality guarantee given in exchange for X's commitment to sign the main contract with Y.
A subsidiary contract that induces a person to enter into a main contract. For instance, if X consents to purchase goods from Y that are made by Z and does so based on Z's guarantee of the high quality of the goods, then X and Z might be deemed to have made a collateral contract that consists of Z's quality guarantee given in exchange for X's commitment to sign the main contract with Y.
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