In MSCD 12.285–315 I explain why it’s pointless and confusing to say represents and warrants, not to mention representations and warranties. No one has made a serious attempt to refute my argument.
But recently I received an interesting report from the front lines. Knowing that I have a thing about represents and warrants, Trevor Grant of the Canadian law firm Miller Thomson let me know that in recent deal negotiations he was involved with, the lawyer for the other side requested, in connection with a standard no-dispute representation, that “represents and warrants” be replaced with “states.”
In this November 2008 blog post I note that instead of represents and warrants you could use a word that’s free of any doctrinal baggage, a word such as asserts. Another such word is states, and Trevor’s message to me was the first time I’d encountered actual use of such a word.
The question is, what prompted the requested change?
Conceivably, whoever requested the change might simply have wanted to avoid the muddle associated with represents and warrants. But if that’s the case, they’re more aggressive than I am, as I’ve elected to stick with represents. Here’s what I said in my blog post on asserts:
A guiding principle in my writings is that the corporate bar is allergic to novelty. I stand a greater chance of having people pay some attention if I recommend that they drop one word in a traditional doublet, as opposed to my recommending that they drop the doublet entirely in favor of a novel alternative.
And those lawyers who can handle the novelty will probably still be nervous about the remedies implications of using asserts, and you’d still have to spend time assuring them that there aren’t any.
But I think it more likely that they requested the change because they think that either represents or warrants (or both?) is a “magic word” that has implications for remedies.
MSCD 12.313 notes how English lawyers are prone to deleting represents, on the assumption that doing so will protect their client from an action for misrepresentation—a dubious notion. English lawyers request that change in response to the Misrepresentation Act 1967, which abolished the doctrine of merger. Given that Canada doesn’t have an analogous statute, it’s not clear whether similar logic was behind the requested change that Trevor told me about.
Maybe it was warrants they wanted to get rid of. In an email exchange a couple of years ago, a Canadian academic suggested to me that in the absence of warrants, a Canadian common law court might say that you’re liable in tort for a misrepresentation but not in contract, because the party in question hadn’t given a warranty. Such thinking is redolent of the seventeenth century, in particular the case of Chandelor v. Lopus, but it might represent the conventional wisdom in Canada, so it might be what prompted Trevor’s counterpart to request the change.
The bottom line is that it’s impossible to tell, without knowing more, what might prompt someone to want to replace represents and warrants with states. If someone asks you to make that change, ask them why it’s important to them. If they say they want to preclude an action for misrepresentation, or an action for breach of warranty, resist the urge to snicker. Instead, tell them that you don’t believe in the “magic words” approach to contract drafting. Say that instead of relying on the verb used for a factual assertion to also convey information regarding remedies, you’d much rather deal with remedies explicitly. If that’s your approach, which verb you use with factual assertions becomes largely irrelevant.
Ken:
I can “state”, from a Quebec Civil Law perspective that “state” has no civil law significance. The Civil Code uses “warrants” for legal warranties (in French, it is “garantir”). In English, we use “represents and warrants”, even though I am not aware of any civil law distinction between the two. In French agreements, we say “declare” which I guess could be translated as “states” (but could also be translated as “declare”!!) . From a plain English perspective, “states” sounds very neutral. I can “state” that I am 9 feet tall, but I am not sure that that would attract the same responsibility as warranting (or representing) that I am 9 feet tall. I suspect that a judge would apply the common intention of the parties, and hold me liable any way (if this statement caused damages, etc.), but why take a chance.
Call me a luddite, but I will stick with represents and warrants because I know a judge will know what I meant. I will let some else take the lead on this innovation!
Kevin
I want the language “warrant” – a “warranty” is a guarantee. In this case, http://wiki.patracer.com/wiki/uploads/e/ee/2008-1462_SJ_Order.pdf, the court found there was not a breach of the license, but a breach of the warranty clause. I query whether saying “I state” would have carried the same sense of promise of truthfulness on the part of the entity giving the warranty.
Kevin: I like déclarer: those drafting contracts in French should be grateful for that simplicity.
But as for represents and warrants, I’ll refrain from repeating the argument laid out in MSCD, other than noting that from a semantic perspective the phrase is hopelessly buggered: I don’t think anyone can say with confidence what it means. Abandoning it in favor of represents doesn’t represent an innovation so much as a flight to coherence.
Ken
Anonymous: You begin your comment by stating that a warranty is a guarantee. What does that mean? What are the implications? The answer is, Who knows?
In the U.S., the law is clear: what verb you use to introduce a factual assertion doesn’t have implications for remedies. You might find of interest the analysis in MSCD.
That said, I’m not advocating that one use states, but from a practical perspective it would do the job fine. If Acme “states” that it’s in good standing in Delaware, it’s clear that it’s making a factual assertion. That’s all that’s required.
Ken
In French, I use “attester” as recommended by Gilles Thibault, author of the templates “Formulaire de droit commercial”. I’m of the opinion that the Civil Code provisions using “warranty” would apply just the same, especially since “to warrant” is a synonym of “to attest” – at least in French. I have been wondering about “attest” or “certify” in English. Could these be alternatives? (I now use “represent” and much to my surprise, have not been asked to revert back to “represent and warrant” – at least not for the past few months.)
Paule: Attest means the same thing as witness; see MSCD 4.41. And regarding certify, see MSCD 12.36.
Again, there’s no magic in what verb you use: its only function is to say, Hey, what follows is a factual assertion. For me, the path of least resistance is represents. And I hope MSCD will serve to weaken resistance to that approach.
Ken