A subsidiary contract that induces a person to enter into a main contract or that depends upon the main contract for its existence.
- For all the reasons which I have already discussed, the relationship created by the letters of credit is separate from and independent of the underlying contracts, including the collateral contract pursuant to which they were opened.
- It is not incorporated by a mere reference to the terms and conditions of the contract to which the arbitration clause constitute a collateral contract.
- Side letters can constitute a variation of the main agreement or a collateral contract with terms distinct from those in the main agreement.
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Syllabification: col·lat·er·al con·tract
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