What Are Representations and Warranties in a Contract?

Every contract has representations and warranties, which are basically the underlying matters or facts as they are being presented in terms of the contract. When selling something such as real estate, the seller represents himself to be the owner, who has the legal authority to sell the property. He warrants that the property is as he represent it to be.

When you buy a new washing machine from an appliance store, you go into the process with certain basic suppositions. These include:

  • The store has the right to sell you the washing machine
  • The washing machine is what the seller says it is in terms of manufacturer and model
  • The washing machine does what it is advertised to do
  • The manufacturer/seller warrant that the product is free of defect for a specified amount of time into the future

A representation is defined as an account or statement of facts, allegations, or arguments. Representations present everything from its past to its current status. In particular, Black's Law Dictionary defines a representation as "A presentation of fact -- either by words or by conduct -- made to induce someone to act, especially to enter into a contract."

A warranty generally moves from the present to the future. The product that you are buying is warranted as being free of defects, and the company agrees to fix any defects for a specified amount of time into the future. Some products advertise that they have a lifetime warranty. As an example, if you buy a set of headphones with a lifetime warranty, then every time they malfunction, you can send them back to the company to be fixed. The warranty obligates the seller to the terms of the contract.

Warranties can be either expressed or implied. Expressed warranties mean they are written into the contract, and, for the most part, buyers should insist upon them. Implied warranties fall under the Uniform Commercial Code, which in all sales of goods implies that there be a "fitness for a particular purpose." Legally within contracts, expressed warranties hold up better in a court of law than implied warranties.

When a contract uses the terms "representations" and "warranties" together, they blend the past, present, and future together within terms of the contract. Every contract is different, but the language is basically the same. Representations and warranties are assurances that one party gives to another party in a contract. These assurances are statements that the purchasing party can rely on as factual.

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