Collateral Oral Agreement

The question before the House of Lords was whether any of the agreements were applicable: Graw S, An Introduction to the Law of Contract (1998), 3rd Ed, Lawbook Company Information Services, North Ryde, pp. 322- 323. However, the High Court decided that this would only apply if the terms of the warranty contract complement or supplement the main contract. If the guarantee contract is incompatible with the main contract, the conclusion of the main contract does not in itself constitute valid consideration in support of the guarantee contract. In this way, the main agreement is essentially considered to be the more important of the two agreements and, therefore, the terms of the ancillary agreement should not divert attention from the commitments set out in the main agreement. In the case of a bilateral guarantee contract, the two parties concluding the main contract also enter into the guarantee contract. .