Reminder: U.S. Judges Don’t Attribute Magic-Word Significance to “Represents” and “Warrants”

An eagle-eyed reader who is aware of my long-standing interest in the phrase represents and warrants told me about a 2008 opinion of the Arizona U.S. District Court, Aspect Systems, Inc. v. Lam Research Corp. (Go here for a PDF copy.)

Here’s the bit that the caught my reader’s eye:

Neither Aspect nor Lam has proved the absence of a genuine issue of material fact regarding the alleged breaches under the 2002 agreement. In the agreement, Lam represented that “it has been using the Assets in the manufacture, service or repair of the AutoEtch and Drytek machines.” (Doc. # 67-2, Ex. 3 ¶ 3a.) That constitutes a warranty that the parts were not obsolete, but rather that they were substantially current, active parts that could be resold.

So in the 2002 contract, Lam made a statement of fact introduced using “represents.” (I confirmed that by checking the contract itself, a copy of which is available here.) The court then referred to that statement as a “warranty.”

According to any magic-worders out there, use of the word “represents” should have caused the court to consider the associated statement of fact to be a representation, leading the court to hold that the only possible cause of action for inaccuracy was an action for misrepresentation (a tort claim) and not an action for breach of warranty (a contract claim).

But by describing the statement as a warranty, the court in effect declined to attribute magic-word significance to the verb represents. No surprise—there are zero U.S. cases in which a court has endorsed the magic-words approach. But even though there’s no shortage of cases reflecting the Aspect Systems approach, it’s helpful to be reminded of them.

In fact, revisiting represents and warrants has caused me to reassess how to handle it. Watch this space.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.