Representation

Representations and Warranties Anatomy™ →Go uptown →intro →prem →sa Dear old Criswell Greetings, my friends Representations and warranties generally | Representations | Warranties | Covenants | Acknowledgements | Representations in the ISDA | Warranties in the GMSLA | Representations in the GMRA | Waiver by estoppel | AcknowledgementCommon representations: Status | Capacity | Authority | No violation | Consents | Obligations binding | Principal | Understanding | Non-reliance | No representation | Unencumbered owner | No default or potential event of default | No litigation | No fiduciary obligation | Representations and warranties Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

A representation is a statement of present or historical fact made by one person to another outside the bounds of a contract that induces that other person to enter a contract. By its nature, a representation is therefore not a term of the contract itself — it cannot be; it was made before the contract came about; it is an egg to the contract’s chicken — although that won’t stop Legal riddling your contract with representations and, usually, co-branding them as warranties for good measure. A false representation may entitle an innocent to claim under the Misrepresentation Act 1967 and rescind its contract, or claim damages for negligent misstatement in tort.

Being founded on the tortious action on negligent misstatement, one of the ingredients of an actionable misrepresentation is that the representer somehow fell short of her duty of care: the simple fact that the representation was false might not be not enough if she can’t cannot reasonably have known it was false. This feels a more significant distinction than it is: tort governs situations where the parties, being randoms, have not had the opportunity to document their duties to one another, so the law steps in to help. Where they have, through the medium of contract, the law says, “you don’t need my clever appeals to the judgment of prudent people on public transport in south London to work out how you must treat each other, because you have worked it out for yourselves.”

Where the parties have written down their respective duties, but they still appeal to a tortious standard — which is what they are doing by writing “representations” into a contract — they are admitting to confusion between the laws of tort and contract. Here the fellow on the Clapham omnibus would surely say that the abstract duty of care maps exactly on to what the parties have voluntarily agreed. Why would it be any different? To be “negligent” under a contract is surely to breach it; no more and no less.

Compare

Representation: A representation is a pre-contractual statement of a present fact, the failure of which entitles an innocent party to rescind a contract altogether (i.e. to put itself in the position it would have been had it never undertaken the ghastly affair in the first place)

Warranty: A warranty is a contractual statement of the truth of a present fact, the failure of falsehood entitles the innocent party to sue for damages for breach of contract (to compensate it for the value of the contract had the statement been correct). It also has a specific meaning as a guarantee of merchantability in the context of a “Manufacturer's Warranty”.

This is why so often you see that most laborious of constructions: “representations and warranties” — the combination giving the wronged party the maximum possible range of remedies.

Promise: This, in Horton Hatches the Egg terms, is what you meant when you said, and what you said when you meant. A promise, if offered, accepted and accompanied by consideration, is your legally binding obligation under a contract.

Undertaking: An undertaking, in a contractual context, is really no different from a promise (though a solicitor’s undertaking is a quite different thing). You might characterise it as a specific promise to ensure that someone else does something (rather than the person making the promise itself), but it isn’t generally used that way.

Covenant: A covenant, strictly speaking, is a promise executed by deed, though usage has long since slipped away from that except for transactions involving the conveyance of land.

In any other context, therefore, covenants and undertakings are nothing more than fancy words for promises, and any lover of plain English should therefore seek them out and, with extreme prejudice, relieve them of their command.

What representations are not

• Law: Representations are generally not made about the law or legal status — those things are called “legal opinions” and you’ll require august counsel to give you one of those and the boredom threshold of Job if you aspire to reading it.
• The Future: Representations are generally also made about things which have already happened — “known knowns”, in the Rumsfeldian argot — and not states of affairs expected to come about in the future. A factual assertion about a future state of affairs is better known as a promise, and you will need it to be a part of your contract, not a prelude to it, if you want to hold your counterparty to it in some tribunal down the line.

Gosh all this talk of the future — that place where, after all, you and I are going to spend the rest of our lives — makes me think of dear old Criswell.

Premium content Here the free bit runs out. Subscribers click 👉 here. New readers sign up 👉 here and, for ½ a weekly 🍺 go full ninja about all these juicy topics👇 Template:M premium summary rep representation

See also

• warranty
• negligent misstatement
• Representations and warranties
• Covenant
• Undertaking
• or you could cut to the chase and go straight to Promise