8.3 Reps and warranties

Warranties, also referred to as representations, are statements of fact. They are made by one party (e.g. a seller, service provider, borrower or licensor) to the other party as at a particular moment in time. The purpose of the warranties is to reflect those facts or events that are important to the other party’s business decision to enter into the transaction (on the agreed terms of the contract). If warranties appear to be incorrect, this would result in rights or remedies under the contract. In this paragraph, we will address a few aspects of warranties and their use in practice.