OK, so we now all know that the phrase represents and warrants is pointless and confusing. My recent article on the subject (here) establishes as much in excruciating detail.
But I don’t recommend that you ask that the lawyers on the other side of a deal replace represents and warrants with states. The benefit of doing so would be more than outweighed by all the hand-wringing and posturing that your request would likely prompt.
Instead, I offer you a much simpler fix—ask that the other side insert the following in the draft:
The verb used to introduce a statement of fact in this agreement does not affect the remedies available for inaccuracy of that statement of fact.
That would serve to put to rest the misconceived notion that represents and warrants has some bearing on remedies.
You could use the same sentence in your drafts if someone is wary of the implications of using states to introduce statements of fact.
7 thoughts on “Neutralizing “Represents and Warrants””
Hi, Ken. If the notion that “represents and warrants” has some bearing on remedies is misconceived, is there a value to adding it (1) to a document that opposing counsel has drafted and that you’re responding to or (2) to include in the first instance in a document you draft, rather than just say “represents and warrants”?
What do you mean by “adding it”? If you mean adding the sentence I refer to in this post, in this post I suggest adding it to the other guy’s draft containing R&W and to your draft with “states,” if “states” makes people nervous.
I guess my point is: if you feel that “represents and warrants” can be replaced with “states,” then: (1) if you see “represents and warrants” in the other guy’s draft, then there’s no need to neutralize anything; and (2) if you think that using “states” in your own draft will make the other guy nervous, then just go with “represents and warrants” since there’s no substantive difference.
I don’t want to include in my drafts stuff that makes no sense. And although most people cheerfully ignore represents and warrants, the chatter out there suggesting that it means something suggests to me that there’s always the potential for a fight over it.
Wait a minute. If there is chatter out there suggesting that “represents and warrants” means something, and if your take is that there is no substantive difference between “represents and warrants” and “states,” then, if you’re on the receiving end of a draft, why not just leave things as is? No need for the “neutralizing” paragraph. In fact, the “neutralizing” paragraph in that instance serves to further stir the pot and catalyze the chatter. That goes to my point #1.
As to point #2–the example in which you’re holding the pen–aren’t there so many things in a contract that “make no sense” and, if so, then shouldn’t there be neutralizing paragraphs for those nonsensical things as well? Assuming that you are correct about “states” being no different than “represents and warrants,” then I suppose that, as an academic matter, you would use “states” to convey written assertions of fact (and you save a couple of key strokes). But, as a practical matter, if there is so much push-back, chatter, and reluctance to depart from “represents and warrants”–and if you feel that that phrase is not distinguishable from “states”–then why go to the mattresses?
I want there to be a meeting of the minds, because I’m not interested in winning fights. If someone thinks that R&W means something, I’m not going to simply rely on the fact that because I’m right I’ll win any fight we get into. Instead, I want to preclude the possibility of a fight.
“So many things in a contract that make no sense”? Not in my world.
“Save a couple of key strokes”? You misunderstand what I do.
So much reluctance? How do you know? As I’ve noted elsewhere, using states might not be that big a deal.
And no assumptions are required: I’m right.
I’m somewhere else on this issue, but I do understand Ken to be giving this advice:
(1) Use ‘states’ when you are the original drafter. If that makes the other side’s drafter fidgety, placate her by adding the neutralizing sentence.
(2) When the other side does the first draft and fills it with ‘represents’, ‘warrants’, or both, and for some reason you do not want to request that every instance be changed to ‘states’, suggest instead the minimal addition of the neutralizing sentence.
As for the substance of the proposed neutralizing sentence, a few comments:
1/ Surely it can’t be literally true that the verb introducing a statement of fact does not affect remedies. For example, what if the introducing verb is ‘denies’?
2/ If the choice of verb is truly without effect on remedies, then even ‘states’ doesn’t make the declarant any more liable than anyone else if the statement of fact is false. If the verb ties the declarant more than any other party to the statement of fact for a remedy, then the verb does affect available remedies, and the neutralizing sentence is false.
3/ If a statement of fact is false, it can have consequences other than remedies: “If Party A’s claim to have good title to Blackacre is inaccurate, then Party A’s admission to the Property Owners’ Association will be void ab initio’. That’s a consequence, not a remedy. The neutralizing sentence deals only with remedies and not the broader idea of consequences.