Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: December 12, 2016
The Firm
201-896-4100 info@sh-law.comMany business contracts include representations and warranties. While often considered “standard” or “boilerplate,” these key provisions become essential if the other party fails to live up to its promises.
In basic terms, a representation is a statement of fact made by one party to another regarding the accuracy of an existing fact the recipient is relying upon, often as an inducement to enter into an agreement. For example, when you buy a new automobile, the seller will represent that it was designed to certain mileage-per-gallon specifications.
A warranty is a guarantee or promise by which one party provides assurance to the other party that certain facts or conditions will be true or will happen in the future. For example, when you buy a new television, the seller warranties that it is, and for a period of time after the sale will be, free of defects and agrees to repair any defects that arise within a certain time period.
Sometimes the terms are used interchangeably, but essentially one is a current or past looking statement and the other is a forward looking statement.
Representations and warranties also imply that the party agrees to protect the recipient against loss if the facts are or, in some cases, become untrue, generally backed up by contractual indemnification.
The form or subject of the representation or warranty can vary significantly depending on the type of contract, e.g. services, insurance, consumer or construction. For instance, during a merger or acquisition, warranty provisions are often essential to the transaction. Sellers must frequently give assurances as to the accuracy of a wide range of statements regarding their business operations, such as the ownership of intellectual property and other assets, the accuracy of financial statements, and material operational details regarding the business the buyer requires in order to be willing to enter into the transaction.
Breaches of representations or warranties can lead to a variety of damages. The aggrieved party may be entitled to breach of contract damages, to potentially void a contract (i.e., if a misrepresentation arises to the level of fraud), or to certain damages specified in the agreement.
As highlighted above, businesses should never skim over the representations and warranties section. In complex transactions involving the sale or purchase of an existing business or real property, it is also essential to have an experienced attorney who can negotiate on your behalf.
Do you have any questions regarding contract warranties? Would you like to discuss the matter further? If so, please contact me, Jeffrey Cassin, at 201-806-3364.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!