What Representations and Warranties Are in a Contract

I'm breaking down common contract terms in "What's In My Contract." Today we will look at "representations and warranties." That sounds really legal, doesn't it? They're in a lot of contracts, especially service contracts. And I'm going to tell you what representations and warranties are.

So usually you will see representations and warranties broken down in two. So:

• Client represents and warrants these things;

• Company represents and warrants these things.

It's usually basically this: each person is promising that certain preconditions are already met.

Let me give you an example.

Client represents that it has all necessary rights to grant the rights granted in this agreement.

That's a super common representation and warranty. That means that Client is promising that they have all the necessary rights to grant any rights that they are granting in the contract. It is a promise that they have already taken care of XYZ that will help them to perform under the contract.

Another representation or warranty might be that you represent and warrant that you're not under any contractual restrictions that would prevent you from performing under the contract. Again, it's promising that this is all taken care of, we promise that we are able to enter into this contract and we're not violating anything else by entering into this contract.

A representation is kind of like a promise that this is true.

And then a warranty is a promise that you will pay up essentially if that representation is false.

They're assurances. Promises. Assertions of fact.

So I hope that helps you to better understand what the heck representations and warranties means. And I'll see you next time.