Representations and warranties
Statements of fact and promises about quality that a party makes in a contract, giving the other side a claim if they prove untrue.
What it means
Representations are statements of fact about the present or past, such as “Seller owns the equipment free of liens.” Warranties are promises that something is or will be true, such as “the software will perform materially as described for 90 days.” Contracts often lump them together, and both give the other side a claim if they turn out to be false.
Common examples include promises that a party has authority to sign, that its work is original, and that it will comply with applicable laws. If a freelance writer warrants that an article is original and it turns out to be copied, the client can claim breach of warranty and may also rely on an indemnity.
The distinction can matter. A false representation that led someone to sign may support a misrepresentation claim, which can sometimes undo the contract, while a breached warranty usually leads to damages. How courts treat the two varies by state. Contracts often narrow warranties with time limits, exclusive remedies such as repair or refund, and a disclaimer of all other warranties.
What to watch for
- Check that every statement you make is actually true and within your control, and qualify it with “to our knowledge” where appropriate.
- Look for a warranty period and an exclusive remedy, such as re-performance or refund, and decide whether that remedy is enough.
- See whether the representations survive the end of the contract, and for how long.
- Compare what each side promises, because a one-sided list may leave you with little protection.
Example clause
Each party represents that it has full authority to enter into this Agreement. Consultant warrants that the Services will be performed in a professional and workmanlike manner consistent with generally accepted industry standards, and Client’s sole remedy for breach of this warranty is re-performance of the nonconforming Services.
The consultant promises competent work, but if it falls short, the fix is redoing it rather than a refund or damages.