[Update: For my definitive take on this subject, see my article Eliminating the Phrase Represents and Warrants from Contracts, 16 Tennessee Journal of Business Law 203 (2015).]
Yes, I know that I’m getting tiresome, they way I harp on about represents and warrants, like a dog worrying a bone. But I have a new element to add to my analysis.
At the heart of misconceptions regarding represents and warrants is the notion that what verb you use to introduce statements of fact can affect remedies. The clearest articulation I’ve seen of that notion is the following, from page 13 of Tina Stark’s book Drafting Contracts: How Lawyers Do What They Do:
By virtue of [the line “The Seller represents and warrants to the Buyer as follows”], every statement in the sections that followed would be both a representation and a warranty.
From that follows the notion that only a representation can support an action for misrepresentation, and only a warranty can support an action for breach of warranty.
One big problem with this literal-minded approach is that in the U.S., it has no support. See MSCD 3.283. If you want a second opinion, note that Glenn D. West, who has also explored this issue, but from a very different perspective, also agrees that the literal-minded approach has no support; see my exchange with Glenn in this 2012 blog post. Thus far, no one has even attempted to show Glenn and me that we are mistaken in this.
But I think that one must focus equally on the semantic failing at the heart of the literal-minded approach. That’s what I do in MSCD 3.278:
But in standard English, the verb used to introduce a statement of fact serves only to identify who is making the statement and the manner in which they’re making it. You could use any number of verbs, and in whatever tense is appropriate: Says. Utters. Proclaimed. And so on. Misapplying represents and warrants is inconsistent with standard English, in that it freights with added significance the verb, or verbs, used to introduce a statement of fact. Only the initiated would think that the verb used could have implications for remedies.
Now here’s my new thought: A corollary is that it doesn’t make sense to constrain the meaning of represents and warrants in the manner proposed by the literal-minded approach. By analogy, one might as well say that for a statement to constitute libel, the statement has to begin with “Roe hereby libels Doe as follows,” or has to refer to itself as being libelous. Whether a statement constitutes libel depends on the content of that statement. Similarly, it makes sense that whether a statement can support an action for misrepresentation, or an action for breach of warranty, depends on the content of that statement and on procedural requirements. It wouldn’t make sense to have it depend on whether the statement is introduced by the verb represents, the verb warrants, or both.