What is the Difference Between Representation and Warranty?
🆚 Go to Comparative Table 🆚The main difference between representation and warranty lies in their definitions and the remedies available in case of a breach.
- Representation: A representation is an assertion of fact made to induce another party to enter into a contract or take some other action. It is a statement of fact that is true on the date the representation is made. If a representation is found to be false, the innocent party may seek remedies under misrepresentation law, depending on the circumstances and the jurisdiction in which the contract is executed.
- Warranty: A warranty is a promise of indemnity if the assertion made is false. It is a promise that a particular statement made is true at the date of the contract, and it can relate to current and/or future conduct and/or facts. A breach of warranty gives rise to a claim for breach of contract, with the main remedy being an award of damages to compensate for the loss.
In summary:
- A representation is a statement of fact made to induce another party to enter into a contract or take some other action.
- A warranty is a promise of indemnity if the assertion made is false.
- The key difference between a representation and a warranty is the remedy available to the innocent party in case of a breach.
Comparative Table: Representation vs Warranty
Here is a table comparing the differences between representations and warranties:
| Representations | Warranties |
|---|---|
| Statements of past or present fact or circumstance | Statements or promises of current and future condition |
| Made during contractual negotiations to induce another party to enter into a contract | Core terms of the contract during performance |
| Refer to past information, as it is impossible for a company or individual to present future information as factual | May refer to past, current, or future facts or circumstances |
| Damages assessed from the date the misrepresentation was made | Damages assessed at the time of the breach |
| Breach may give rise to a right to void the contract | Breach does not give rise to a right to void the contract |
| Can be negligently made | Must be made with a certain level of assurance or knowledge |
| Can entitle the claimant to tort damages and rescission | May entitle the claimant to damages but not rescission |
In summary, representations are statements of past or present facts or circumstances made during contractual negotiations to induce another party to enter into a contract. In contrast, warranties are statements or promises of current and future conditions that are core terms of the contract during performance. The consequences of breaching representations and warranties differ, with representations potentially leading to voiding the contract and entitling the claimant to tort damages and rescission, while warranties may only entitle the claimant to damages.
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