Differences between Representations and Warranties

Differences between Representations and Warranties

In contract law, a warranty has various meanings but generally means a guarantee or promise which provides assurance by one party to the other party that specific facts or conditions are true or will happen. Warranties provide customers with legally-ensured service replacement or correction of issues insofar as the warranty stipulates in its conditions, for the duration of its term. Every contract has representations and warranties, which are basically the underlying matters or facts as they are being presented in terms of the contract. A representation is defined as an account or statement of facts, allegations, or arguments.

The differences between representations and warranties are discussed as follows:

Representations –

  • A representation is a statement made by the proposer to the insurer relating to a proposed risk.
  • A representation is required to be substantially true, i.e., the material portion of the statement must be literally true even though the immaterial portion of the statement need not true or correct.
  • A representation may pertain to both material and immaterial facts.
  • With regard to representation if the insurers want to avoid the contract on groups of misrepresentation, it has to be proved by the insurers that the misrepresentation relates to a material fact.
  • A representation does not appear in the policy.

Warranties –

  • A warranty is an undertaking by the insured to the effect that he shall or shall not do a certain thing or that some conditions shall be fulfilled.
  • On the other hand, a warranty must be strictly and literally complied with.
  • Warranties may be either express or implied.
  • On the other hand, with regard to warranties any breach whether material or immaterial is enough for the insurers to avoid the contract.
  • But a warranty must appear in the policy either expressly or by way of reference.