In episode 45 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone provides essential insights on collateral warranties for subcontractors. He stresses the significance of these warranties in establishing a contractual connection between subcontractors and third parties. Jacob advises subcontractors to meticulously examine the terms of collateral warranties, as they may extend liabilities or impose additional insurance requirements. He also warns of the risks tied to novation clauses and the assignment of warranty benefits. Subcontractors are encouraged to consult legal experts to safeguard their rights and interests when dealing with collateral warranties.

KEY TAKEAWAYS:

• Understanding the definition and purpose of collateral warranties.
• Always read a collateral warranty prior to signing it, as no two warranties are the same.
• Clauses that can extend liability, impose insurance obligations, and restrict subcontractor rights.
• The risks associated with Novation Clauses, which may help or hinder you depending on how they are set up.
• The implications of assigning warranties and clauses which obligate multiple warranties being provided.

BEST MOMENTS:

“So fitness for purpose? Very, very bad. If you see it in a document, you must insist that it is struck out.”

"They don't read like a subcontract and start introducing all manner of rights and obligations, making you liable for elements of your design and sometimes your finished work to a third party that you might never have heard of."

"There have been some colossal hikes in the price of insurances in the last few years, so it's important when you're reading the warranty that where the insurances are mentioned, there is a statement that says as long as that insurance is available at commercially reasonable rates."

"Novation can be a good thing or a bad thing. It depends whether that novation clause contains obligations for the employer to pick up the bill for anything the contractor hasn't paid you."

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/

Instagram - www.instagram.com/qs.zone/

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