Statements true and correct: Overview, definition, and example
What are statements true and correct?
Statements true and correct refer to assertions made in a contract or legal document that confirm the accuracy and reliability of the information provided. When a party in an agreement declares that their statements are "true and correct," they are certifying that the details they have shared, such as facts, conditions, and representations, are accurate to the best of their knowledge at the time the statement is made. If any of these statements turn out to be false or misleading, the party making the statement could face legal consequences for misrepresentation.
In simpler terms, "statements true and correct" means that the person is confirming that the information they’ve provided is accurate and honest.
Why are statements true and correct important?
Statements true and correct are important because they serve as a guarantee that the information provided in legal agreements is reliable and honest. This helps establish trust between parties in a contract and ensures that both sides can make informed decisions based on accurate data. If a statement is later found to be false, the party who made the statement could be held liable for damages or face legal action. Therefore, including such a declaration helps protect both parties from fraud or misrepresentation.
For SMB owners, ensuring that statements made in contracts or agreements are true and correct is essential for avoiding legal issues and maintaining credibility.
Understanding statements true and correct through an example
Imagine your company is entering into a contract to purchase office equipment from a supplier. As part of the agreement, your company provides certain statements regarding its financial condition and business standing. By including a clause that these statements are "true and correct," you are assuring the supplier that the information you've provided is accurate. If the supplier later discovers that the financial information was falsified, your company could face legal consequences for providing false statements.
In this example, the "true and correct" statement ensures that both parties are operating based on accurate information, reducing the risk of disputes later.
Example of a statements true and correct clause
Here’s an example of what a "statements true and correct" clause might look like in a contract:
“The Company represents and warrants that all statements made in this Agreement, including but not limited to financial statements, representations of business operations, and ownership interests, are true and correct as of the date of execution. The Company further agrees to notify the other Party immediately if any such statements become false or misleading during the term of this Agreement.”
Conclusion
Statements true and correct are essential for ensuring that the information provided in contracts and agreements is accurate, reliable, and legally binding. For SMB owners, making sure that all statements are truthful and correct in legal documents helps prevent future disputes, legal challenges, and damage to business reputation. By including such clauses, businesses protect themselves and build trust with other parties, ensuring smoother and more reliable transactions.
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.