What is an example of a collateral contract?

A rental agreement is an example of a collateral contract because it is typically a separate agreement that exists alongside a primary contract, often involving the lease of property. In this context, a collateral contract serves to support or relate to a main transaction, which could involve a purchase or sale.

In many scenarios, when a person rents property, they may also have a main contract for the sale of that property, or they may be entering into a primary agreement surrounding the terms of the rental activity itself. The rental agreement specifies the terms under which the tenant occupies the property but does not necessarily overlap with or contradict any primary sale contract.

The other options represent agreements that are generally considered primary contracts on their own. A will is a legal document distributing assets after death, a contract for sale directly involves the transfer of ownership rights for goods or property, and a brokerage agreement is often the underlying contract that directs a broker's actions in exchange for compensation. These do not typically fit the definition of a collateral contract, as they stand alone without being inherently supportive of another primary agreement.