My friend Ken Adams is expanding his crusade against the verb warrant in contracts. He says, “I now propose that the clearest way to have a party make a statement of fact in a contract is to use states instead of represents and warrants or even represents.”
FOOTNOTE: Ken goes on to recommend that drafters expressly concede reliance: In entering into this agreement, each party is relying on any statements of fact made in this agreement by the other party. He doesn’t seem to consider that a drafter might intend just the opposite, for example with a so-called knowledge rep. Suppose that a particular representation were: Vendor represents to Buyer that, so far as Vendor is aware, without having done any particular investigation, the Products do not infringe any patent owned or assertable by a third party. It’s extremely unlikely that Vendor would want to waive the requirement that Buyer prove its reasonable reliance on that representation.
It’s unfortunate that Ken, who has a national following, makes such a misguided proposal. Certainly I agree with him that, if the substance of a statement amounts to a warranty, then the statement should be enforced as such, even though the drafter didn’t use the actual word warrant or warranty. And I’d be the last to argue that contract drafters should mindlessly use so-called court-tested language at the expense of clarity and conciseness.
But it’d be a big mistake for drafters to blithely throw away the benefits of these accepted, highly-useful shorthand terms of art. Practically every judge, and every competent contract lawyer, knows the meanings of represent and warrant. Using those terms can streamline the process of contract drafting.
Even more importantly: When a drafter uses well-known terms of art such as represent and warrant, the drafter will be speeding up the other side’s contract-review process, and thus reducing the time needed to get ink on the signature line — and with it, the attendant client frustration.
Related post: Contract creation — an industry, not a craft
I think Ken’s point is that “well-known terms of art such as represent and warrant” are not well-known and, more importantly, clearly and consistently used. By forcing a move to non-traditional language, the contract drafter is forced to draft with precision and the reviewer is more likely to understand the exact representations and obligations that the other side is making.