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5. Golden City Council (the Council), is the owner of Silver Stadium (the stadium) which is home to a local football club, Golden Silver Stars

5. Golden City Council (the Council), is the owner of Silver Stadium (the stadium) which is home to a local football club, Golden Silver Stars FC. The Council entered into a 20 year lease arrangement with Silver Stadium Management Company for the management of the stadium facilities. The council engaged Your Construction Company to design and construct the stadium under a building contract. On 1 March 2015, the council was notified that Your Construction had completed the practical stadium works on 28 January 2016. The Council then entered into a 20 year lease with the management company. The lease contained a clause to the effect that the tenant shall be responsible for repairs of the premises. All the parties entered into a collateral warranty agreement in respect of the works under the building contract. Soon after the delivery, the stadium experienced certain defects namely, paint delaminating and inadequate resistance for floor tiles causing spectators to slip and fall. The management company seeks to claim for damages against the Your Construction and the council for the defects. a. Explain the concept of collateral warranty in construction contracts. [5]. b. With reference to decided cases, discuss whether Silver Stadium Management Company will succeed in this lawsuit against the council and Your Construction.

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