Document background
Collateral Warranty Agreements are essential documents in Saudi Arabian construction and development projects, particularly where multiple parties have interests in the quality and performance of construction work or professional services. These agreements are commonly used when purchasers, tenants, or funders require direct rights against contractors or consultants who have performed work on a property but with whom they have no direct contractual relationship. The document must comply with Saudi Arabian law, including Sharia principles, and typically includes warranties regarding workmanship, materials, and professional standards. The Collateral Warranty Agreement becomes particularly important in large-scale developments where third-party rights need protection, and in situations where project financing requires additional security through direct warranties from key project participants.
