No representations: Overview, definition, and example
What is no representations?
No representations refers to a clause in a contract where one or both parties state that they are not making any promises or guarantees (representations) about certain facts or circumstances. This clause helps limit liability by clarifying that the parties are entering the agreement without relying on statements that aren’t explicitly included in the contract.
Why is no representations important?
This clause is important because it protects parties from being held accountable for assumptions, misunderstandings, or verbal statements not outlined in the agreement. It ensures that the contract’s written terms are the sole source of truth and prevents disputes arising from claims of unspoken guarantees or assurances.
For businesses, a no representations clause reduces risk by clearly defining the scope of obligations and avoiding liability for unintended commitments or reliance on external factors.
Understanding no representations through an example
Imagine a software developer enters a contract to provide a custom-built app to a client. The client asks if the app will work with future versions of a specific operating system, but the developer doesn’t include this in the written agreement. The no representations clause ensures that the developer isn’t held liable if the app doesn’t support those future versions since the agreement didn’t explicitly include that promise.
Another example is a real estate transaction. A seller might include a no representations clause to state that they are not guaranteeing the property’s future value or market conditions. This ensures the buyer cannot later claim that they relied on the seller’s verbal assurances about how much the property might be worth in a few years.
An example of a no representations clause
Here’s how a no representations clause might look in a contract:
“Each Party acknowledges that it has not relied on any representations, warranties, or statements made by the other Party, except as expressly set forth in this Agreement.”
Conclusion
A no representations clause limits liability by ensuring the parties rely only on the written terms of the agreement and not on external statements or assumptions. It provides clarity, reduces the risk of disputes, and reinforces the importance of clearly documenting all promises and obligations within the contract. By including this clause, businesses can protect themselves from unintended commitments and potential legal challenges.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.