The High-touch Legal Services® Blog…for Startups!

© 2009-2020 Dana H. Shultz

What Does “Represent and Warrant” Mean?

Photo of contract being signed for post about meaning of the phrase "represent and warrant"

This post discusses the meaning of the phrase “represent and warrant“. This is part of Dana Shultz’s Canonical Questions on the Law® series of questions and answers about legal issues, concepts and terminology.

Distinguishing Representations from Warranties

To understand what the contractual phrase “represent and warrant” means, we need to know what representations and warranties are.

  • A representation pertains to the state of affairs at the time the parties enter into a contract. Here is an example of a representation in a stock purchase agreement: “Purchaser represents that Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of holding the Shares.” The purchaser makes this representation concerning the purchaser’s status to help the issuing corporation satisfy its securities-law compliance obligations.
  • In contrast, a warranty pertains to a requirement during the contract’s term. Here is an example of a warranty in a stock purchase agreement: “The Company warrants that the Shares will be duly and validly issued.” The Company makes this warranty so the purchaser will be assured that s/he will receive what s/he has paid for.

Cringing: “Represent and Warrant”

Those of us who care about proper legal writing cringe when lawyers fail to distinguish between representations and warranties. For example, they might write, “Party X hereby does represent and warrant….”

Then they follow that introduction with a mixed list of representations and warranties. The problem is that such an approach ostensibly makes each representation and each warranty both a representation and a warranty – which is not correct!

So, if you see an agreement that presents representations and warranties separately, you can take comfort from knowing that a lawyer exercised care in preparing that agreement.

Check out all posts about contracts.

Photo by Cytonn Photography on Unsplash

Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

Categories
Contracts