Contract of Representation

Contract of representation represents truth in a contract. Each contract has warranties and representations which underscore facts and issues pertaining to agreement terms. When selling something in the form of real estate, for example, the seller represents him or herself as the owner, who is the authority to sell the property. He or she warrants that the property in question has been represented truthfully.

When you purchase a new washing machine from a store, you go through the process with certain suppositions, such as:

  • The store has a right to sell the washing machine to you
  • The washing machine works as stated in an advertisement
  • The model and manufacturer of the washing machine is true
  • The seller/manufacturer warrant that a product is free from defects for a certain period

When an agreement invokes terms such as “warranty” and “representation” together, they combine the past, present, and future within the confines of the agreement. Each agreement differs, but the language is the same. Warranties and representations are guarantees that a party issues to another within a contract. Such assurances are a statement that the buying party can purchase goods or service in good faith.

Moreover, a representation is presented as a statement of facts, arguments, or allegations. It also displays everything from past to current. A representation comprises a statement by one or several contracting parties to another at the time or before the drafting of the agreement pertaining to a circumstance or fact that’s relevant to the agreement. Also, the representation should be vital to all parties involved. In the world of insurance, representation is collateral.

Further, a distinction must be made between a representation and a warranty. The former precedes the agreement of insurance, and not part of it. Warranty comes with the agreement and must be filled as intended. When discussing the laws of descent and distribution, a representation is the principle in which the problem of the deceased person inherits or takes a share in the estate, where a relative would have inherited if living. Moreover, representation is a name of a statement or plea that’s presented to lords during court session, when a judgement is under review under Scots law.

Warranty Benefits

Warranties usually shift from the present to the future. The product you are getting is warranted as being new and defect-free. Also, the company will address any damage or defection for a certain time. Certain products advertise lifetime warranties.

  • Example: If you purchase headphones with a lifetime warranty, you may send them back to the business if a malfunction occurs. The warranty would obligate the seller to abide by the contract and fix the headphones.

Warranties can be implied or expressed. Expressed warranty means the terms are written into the agreement and buyers should insist all warranty claims are included in the contract. Implied warranties simply imply that a product is free of defects or damage. It’s worth noting that express contracts are better than implied ones when presenting a warranty case before a judge. 

License Agreements

When it comes to license agreements, many people fail to know the differences between representation, covenants, and warranties. Also, many believe the terms are the same and can be used interchangeably. This is not the case. Take note of the following definitions:

  • Covenant: A covenant entails a promise from a person who pledges something to be completed or will be done in the future. For instance, a licensee would pay licensors a flat royalty of 5 percent of gross revenues from the sale of the licensed product. Another example is if company A agrees not to sue company B under patents listed for infringement from any act from company B of the use, manufacturer, offer, or sale that happens after an effective date.
  • Warranty: This entails a stipulation or undertaking where a seller or manufacturer guarantees that a contract is stated as promised. For instance, a licensor warrants a licensee that it did not receive any claim and is not worried that the licensed technology misappropriated or infringed the rights of any other individual.
  • Representation: This comprises a statement from one party that a statement is factual. Moreover, warranties should be a statement from a party and will accept any financial burdens if proved to be untrue.

To learn more about contract of representation, you can post your job on UpCounsel’s website. UpCounsel’s attorneys will provide information on contract clauses and terminology that you may not understand. In addition, they will read over any questions on your behalf to see if any contract terms work to your disadvantage.