Collateral Contracts Argumentative Essay Sample

Published: 2021-07-18 18:00:07
essay essay

Category: Law, Leadership, Writing, Books, Contract, Statute, Party, Agreement

Type of paper: Essay

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A collateral contract is a separate contract besides the original contract that assigns the rights and obligations of the existing contract to an independent third party. Writings in such a contract form the basis of agreement between the parties in the original contract and the third party (Collins, 2003).
Collateral contracts should be in writing since they fall under the statute law of frauds. In the statute, the provisions are that collateral agreements require evidence in a form of writing, and it is only if they are presented in writing that the law considers them enforceable. Writings in these contracts ascertain the key intentions of the parties and acts as a proof of agreement between the parties. Use of writing also helps in avoidance of confusion in circumstances of breach of the principal agreement.
However, the importance of writing is overlooked in the leading-object rule of law. The leading-object principle does no contract apply the statute of frauds. Under this principle, a contract that part or all duties of a third party is not considered a promise. This applies if the considerations of the promise are apparently meant for the promisor personal advantage, relatively to the benefit of the third party. The leading object principle applies in cases that involve agreements to pay debts owned by individuals and corporations (Collins, 2003).
The leading object exception does not apply to contracts in land interests, marriage; contracts to cater for debts of another, i.e. if the primary debtor fails and contracts that need not be performed within one year of signing. All these contracts bind under the statute of fraud and, therefore, require writings to make them binding and considerable under law.
Reference.
Collins, H. (2003). The Law of Contract. Cambridge University Press: New York.

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