Collateral Contract – a side agreement made before or at the same time that relates to a contract that, if unintegrated, can be supplemented by evidence of the side agreement

collateral contract:
(1809)

1. A side agreement that relates to a contract that, if unintegrated, can be supplemented by evidence of the side agreement; an agreement made before or at the same time as, but separately from, another contract.  See COLLATERAL-CONTRACT DOCTRINE. [1]

     Excerpt from P.S. Atiyah’s An Introduction to the Law of Contract (3d ed. 1981):

     “The term ‘collateral contract’ has no very precise meaning in the law. It is generally used as a label for a contract Which is collateral, or by the side of, another contract. A great many examples of implied or constructive contracts created by the Courts are collateral in a broad sense. . .  [A]lthough the normal presumption is that the parties intend a written contract to be exclusive evidence of their intentions, it is always open to a party to show that in fact the writing did not exclusively represent their intentions, because of a ‘collateral’ contract made during the negotiations but not incorporated in the written instrument. [2]

References:

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[1]: Black’s Law Dictionary Deluxe Tenth Edition by Henry Campbell Black, Editor in Chief Bryan A. Garner. ISBN: 978-0-314-61300-4

[2]: P.S. Atiyah, An Introduction to the Law of Contract 80 81, 161 (3d ed. 1981).

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