#contract #law #terms
Alternatively, the collateral contract may be between only one of the parties to the other contract and a third party, as in Shanklin Pier v Detel Products [1951] 2 KB 854. The rules governing the discovery of the presumed intention of the parties will be applied. Thus, where A enters a contract with B on the faith of an express promise by C, there is a collateral contract between A and C. This principle is of general application, but it is of special significance with respect to the relationship between a guarantor and the principal debtor, and to the relationship between dealer and hirer in contracts of hire-purchase.
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