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Representations and Warranties Clause

A set of factual statements each party makes about itself and the deal, which the other party relies on and can sue over if they prove untrue.

Reviewed by GC AI Solutions Team•Updated August 2026

Definition

A representations and warranties clause is a set of factual statements the parties make about themselves, the subject of the deal, and their authority to enter it. A representation is a statement of present or past fact that induces the other party to sign, and a warranty is a promise that the fact is true. Together they allocate risk, because if a statement is false the relying party can claim breach and, in many deals, indemnification. Reps are often qualified by knowledge and materiality, and in M&A they are brought down to the closing date as a condition to closing.

  • States facts each party relies on, such as authority, ownership, compliance, and the absence of litigation
  • Converts those facts into promises the other party can sue on if they prove untrue
  • Allocates risk by assigning who stands behind which facts
  • Anchors indemnification, since a breached rep is the most common indemnity trigger
  • Gets qualified by knowledge and materiality, and in M&A is brought down to closing

Representation and warranty insurance has made the scope and survival of reps a central negotiation point in mid-market M&A.

What It Does

Representations and warranties are where the deal’s facts get put in writing and made actionable. They are the first thing diligence tests and the first thing a dispute reopens. For in-house counsel, they are the backbone of risk allocation and the hook that connects a false statement to a remedy. The operative questions are which facts each side stands behind, how heavily those reps are qualified by knowledge and materiality, whether they survive past closing, and whether a breach feeds the indemnity. A practical test: read the reps with the disclosure schedules next to them, because a broad exception on a schedule can hollow out a rep that looks airtight in the body.

When You'll See It

Representations and warranties appear in nearly every substantive contract: M&A purchase agreements, financing and credit agreements, SaaS and license agreements, supply contracts, and employment and equity documents. In commercial deals they run a few mutual reps on authority and enforceability; in M&A they expand into pages of seller reps backed by disclosure schedules. They are most heavily negotiated in M&A, where the seller’s reps and their survival period drive the indemnity.

It matters most where one side is buying something it cannot fully verify, such as a business, a portfolio, or a software platform. The less you can confirm in diligence, the more weight the reps carry.

Examples

Regeneron Pharmaceuticals, Inc.

Sanofi, Fifth Amendment to License and Collaboration AgreementMutual + organization and authorityMutual2022
"Each party represents and warrants to the other Party, as of the Effective Date, as follows: (a) it is duly organized and validly existing under the Laws of its jurisdiction of incorporation; (b) it has full corporate power and authority and has taken all corporate action necessary to enter into this Fifth Amendment[…]"
Source

Fate Therapeutics, Inc.

Ono Pharmaceutical Co., Ltd., AmendmentMutual + enforceabilityMutual2022
"Each Party represents and warrants to the other Party as of the execution of this Amendment, that (i) such Party has taken all necessary action on its part required to authorize the execution and delivery of this Amendment and the performance of its obligations hereunder, and this Amendment constitutes a legal, valid and binding obligation of such Party that is enforceable against it in accordance with the terms[…]"
Source

SmartRent, Inc.

Kristen Lee, First Amendment to Employment AgreementMutual + authority to signMutual2024
"Each party represents and warrants to the other party that (i) it has the authority to enter into this Amendment and to grant the rights contained herein, and (ii) the person signing this Amendment is authorized to sign on behalf of that party."
Source

US Farms & Mining, Inc.

CSRE Properties Tennessee, LLC (CleanSpark), Real Estate Purchase and Sale AgreementOne-sided (Seller) + materiality bring-downOne-Sided2024
"Accuracy of Seller’s Representations and Warranties. All of Seller’s representations and warranties contained in or made pursuant to this Agreement shall be true and correct in all material respects as of the Closing Date."
Source

Advanced Micro Devices, Inc.

Underwriters, Underwriting Agreement (Senior Notes)Knowledge-qualified + IP and no-litigation2025
"[…] (i) to the knowledge of the Company, there is no material infringement by third parties of any such Intellectual Property; (ii) to the knowledge of the Company, there is no pending or threatened action, suit, proceeding or claim by others challenging the rights of the Company or any of its subsidiaries in or to any such Intellectual Property[…]"
Source

Point Energy Partners Petroleum, LLC

Vital Energy, Inc., Purchase and Sale AgreementNo-other-representations disclaimer2024
"[…] as to the accuracy as of the Closing Date of the representations and warranties of Seller set forth in this Article 4, (i) Seller makes no other representations or warranties, express or implied, and (ii) Seller expressly disclaims all liability and responsibility for any representation, warranty, statement[…]"
Source

Negotiate

If you're relying on the reps:

Buyer or customer

  • Get broad, unqualified reps on the facts that matter most, such as title, IP ownership, and compliance.
  • Resist sweeping knowledge and materiality qualifiers that hollow out the reps.
  • Require a bring-down of the reps to the closing date as a condition to close.
  • Tie a rep breach directly to indemnification with a workable survival period.
  • Add a full-disclosure or no-misstatement rep where the facts warrant it.

If you're making them:

Seller or vendor

  • Qualify reps by knowledge and materiality wherever defensible.
  • Use the disclosure schedules to carve out known exceptions.
  • Shorten the survival period so stale reps cannot be claimed years later.
  • Add a no-other-representations disclaimer to block reliance on anything outside the contract.
  • Cap rep-and-warranty indemnity with a basket and a ceiling.

Every qualifier is a risk shift. Track where the facts move from one side to the other.

Red Flags

  • Sweeping knowledge and materiality qualifiers that turn firm facts into near-meaningless statements.

  • Reps with no survival period or an extremely short one, leaving no time to discover a breach.

  • A no-other-representations disclaimer paired with thin contractual reps, which narrows your recourse.

  • Reps decoupled from indemnification, so a false statement carries no clear remedy.

  • Disclosure schedules that swallow the reps with broad, vague exceptions.

Representations and Warranties Clause FAQs

What is a representations and warranties clause?
A set of factual statements each party makes about itself and the deal, which the other party relies on and can sue over if they prove untrue.
What is the difference between a representation and a warranty?
A representation is a statement of fact that induces a party to enter the contract. A warranty is a promise that the fact is true. A false representation can support a misrepresentation claim, and a breached warranty supports a breach-of-contract claim.
How do you draft representations and warranties?
State each fact clearly, qualify by knowledge or materiality where appropriate, list exceptions on disclosure schedules, and tie breaches to indemnification and a survival period.
What does it mean to bring down representations?
It means the reps must be true again as of the closing date, not only at signing. A bring-down is a standard condition to closing in M&A.
Can you limit liability for a breach of warranty?
Yes. Parties commonly cap rep-and-warranty indemnity with a basket and a ceiling, set a survival period, and qualify reps by materiality.
What are standard representations and warranties?
Common ones include due organization, authority to contract, enforceability, title to assets, compliance with laws, no conflicts, no undisclosed litigation, and tax and financial-statement accuracy.

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This content is for informational purposes only and does not constitute legal advice.