Clause guide
Representation Clause clause: meaning, risks, and what to negotiate
Contains statements of fact that one party says are true when entering the contract.
What it means
If a representation turns out to be false, it may give the other party grounds for legal claims or termination.
Common risks
- • Representations may be too broad.
- • They may cover facts outside your direct control.
- • False representations can trigger liability.
What to check before signing
- • What facts are being represented as true?
- • Are the representations qualified by knowledge or materiality?
- • Do they survive after signing?
Negotiation ideas
- • Add knowledge qualifiers where appropriate.
- • Limit representations to material facts.
- • Remove statements you cannot verify.
Example clause
“Each party represents that it has full authority to enter into and perform this Agreement.”
Frequently asked questions
What is a representation in a contract?
It is a statement of fact that one party gives to the other when making the agreement.
Related clauses
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