What are the representations and warranties?

What are the representations and warranties?

A representation is an assertion of past or existing fact given by one party to induce another party to enter into an agreement. A warranty is a promise that the assertion of existing fact or future facts are or will be true, along with an implied promise of indemnity if the assertion is false.

What is the difference between an undertaking and a warranty?

As statements of present fact warranties can be contrasted with undertakings, which are promises to do (or not to do) something in the future. If it later transpires that a warranty given by A is untrue, B has a contractual claim for damages to cover loss he suffered as a result of that untruthfulness.

Are warranties also representations?

A representation is an assertion as to a fact, true on the date the representation is made, that is given to induce another party to enter into a contract or take some other action. A warranty is a promise of indemnity if the assertion is false.

What are warranties in M&A?

In the context of M&A transactions, warranties are factual statements contained in the acquisition agreement generally in relation to the target’s business and profitability, as well as assets and liabilities.

What are considered fundamental representations and warranties?

– Fundamental Representations & Warranties of the seller consist of those key representations needed to insure that the buyer obtains the benefit of its bargain. – Fundamental Representations & Warranties are often carved out from the general survival period, indemnification basket and indemnification cap.

Is an undertaking a contract?

1 An undertaking is an agreement to do something in the future. A contract might provide that you “undertake to” do something, or it might just say that you “shall” do it or that you “agree to” do it.

What is a warranty in contract law?

A warranty is a term of the contract, a breach of which gives the innocent party the right to claim damages but not to treat the contract as repudiated. Damages for breach of warranty are calculated on a contractual basis and aim to put the claimant in the position he would have been in had the warranties been true.

What are warranties in a contract?

Related Content. An assurance or promise in a contract, the breach of which may give rise to a claim for damages. It is essentially a minor term of a contract.

What is a warranty clause in a contract?

A warranty clause is a provision in a contract that generally provides a promise specifying that something is true or will happen. In contract law, this clause can have more than one meaning, and it tends to be one of the most misunderstood.

What are the two main types of warranties?

There are two types of warranties: express warranties and implied warranties.

What is the standard warranty?

Standard Warranty means the assurance that the Products and/or Professional Services satisfy – for a limited period of time – the required quality or performance in accordance to the provisions of Article 18.

What’s the difference between representation, warranty and undertaking?

What is the difference between a representation, a warranty and an undertaking in a contract? The words “represents, warrants and undertakes” are often used separately, or as a group, in contracts.

When to use represents, warrants and undertakes in a contract?

The words “represents, warrants and undertakes” are often used separately, or as a group, in contracts. They may precede various statements, for example as to capacity to enter into the agreement, an ability to grant the rights in question, the quality of the goods or services being provided or the accuracy of certain factual matters.

When do you use representations and warranties in a loan?

Representations and warranties are commonly used in acquisition, joint venture, publishing, employment, and loan contracts. In a loan contract, the borrower involved in a financial transaction will provide representations and warranties to the lender as a way to convince the lender to issue a loan.

Can a breach of warranty void a representation?

However, unlike a representation, a breach of warranty does not give rise to a right to void the contract. This is why using the term “represents and warrants” can be very dangerous — making both a representation and a warranty can give rise to a broader range of remedies than one or the other alone.