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Collateral warranty held to be a construction contract

Building Law Monthly

Collateral warranty held to be a construction contract

In Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) LLP [2022] EWCA Civ 823, the Court of Appeal held, by a majority, that a collateral warranty was a construction contract for the purposes of s104(1) of the Housing Grants, Construction and Regeneration Act 1996. However, it does not follow from this decision that all collateral warranties will now fall within the scope of s104(1). In every case it will depend upon the wording of the particular collateral warranty. Further, there are potentially significant differences between the reasoning of the members of the court which may in future make it difficult in some cases to determine whether a particular collateral warranty falls within the scope of s104(1). All that can be said at this point in time is that the effect of the decision will be to increase the number of collateral warranties that may fall within its scope.

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