Collateral contract

A collateral contract is like an extra agreement on top of the main agreement that two people or companies make with each other. It's like when you promise to do something for someone, but you also promise someone else that you will do it too. For example, let's say your mom promises to buy you a toy if you do well in school. But then your dad tells you that if you do well in school, he will take you to your favorite restaurant as well. So both your mom and dad have made separate promises to you, but they are both related to how well you do in school. This is kind of like a collateral contract. It's an additional promise that someone makes, but it's related to the main agreement. This can help make sure everyone involved keeps their promises and everyone gets what they were promised.