Representations and warranties: Difference between revisions

There is a further colour of logic to including representations in your contract if your counterparty is one of those rare organisations that are susceptible, in these modern time, to [[ultra vires]]. Here, a [[representation]] (as opposed to a [[warranty]]) gives you a leg to stand on should your {{t|contract}} turn out to have none, being void for [[ultra vires]]. Now that assurance, freed from the usual shackles of [[concurrent liability]] — since there is, [[Q.E.D.]] no [[contract]] — dangles fruitily before you as an open-and-shut action in [[tort]] for [[negligent misstatement]]. There is no [[ultra vires]] defence to a [[tort]]. But as a [[warranty]], being part of a contract which — as you have just learned — is void ''[[ab initio]]'' as being outside the powers of your counterparty to make.<ref>These days, [[ultra vires]] has largely receded from the corporate governance frameworks in most sensible jurisdictions so only weird counterparties like municipal councils — yes, and why are ''they'' trading tranched [[CDO]]s? — pose a serious risk.</ref> it is useless.