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- Dictionarycollateral contract
noun
- 1. a subsidiary contract which induces a person to enter into a main contract or which depends upon the main contract for its existence.
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noun
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A collateral contract is usually a single term contract, made in consideration of the party for whose benefit the contract operates agreeing to enter into the principal or main contract, which sets out additional terms relating to the same subject matter as the main contract. For example, a collateral contract is formed when one party pays the other party a certain sum for entry into another contr... Wikipedia