floating warranty

Quick Reference

A guarantee given by one person to another that induces this other person to enter into a contract with a third party. For example, a car dealer may induce a customer to enter into a hire-purchase contract with a finance company. If the car does not comply with the dealer's guarantee, the customer may recover damages from the dealer, on the basis of the hire-purchase contract, even though the dealer is not a party to that contract.

Subjects: Financial Institutions and Services.

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