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ARTICLE · 10 DECEMBER 2018

Collateral Warranty Signed Later Than Practical Completion Had Retrospective Effect

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In Swansea Stadium Management Company Ltd v. City & County of Swansea and Interserve Construction Ltd [2018] EWHC 2192, the contractor argued that the tenant's claim under an undated collateral warranty ...

United KingdomReal Estate and Construction

In Swansea Stadium Management Company Ltd v. City & County of Swansea and Interserve Construction Ltd [2018] EWHC 2192, the contractor argued that the tenant's claim under an undated collateral warranty had been issued outside the statutory limitation period and was unenforceable. The parties' disagreed about the effective start date of the warranty which was important as this was the date on which the cause of action arose and from which the limitation period was calculated. The issue was resolved by the Technology and Construction Court (TCC) which held that the warranty had retrospective effect to the date of practical completion (PC) despite having been signed later than PC. This meant the tenant's claim had indeed been issued outside the limitation period. The claim was therefore unenforceable and was struck out.

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