Representations and Warranties” or “Reps and Warranties” are statements of fact made by one or more parties to an agreement, which are to be true regarding the applicable certifying party as of a particular time or times (e.g., at signing and then at the Closing). In some situations, it is typical to have reciprocal or substantially similar Reps and Warranties that are made by all parties to an agreement (e.g., involving a Merger of equals). In other cases, one party’s Reps and Warranties may be much more extensive than those of another party (e.g., with an Equity Financing agreement involving an Issuer and one or more Investors).

Reps and Warranties often are very broad in scope and not drafted in a customized manner to be accurate on their face. Instead, Reps and Warranties often are supplemented by Disclosure Schedules (or a Schedule of Exceptions), which are to be read together with the Reps and Warranties in order to make the Reps and Warranties, together with the responsive disclosures, accurate as a whole.

The parties to an agreement frequently will negotiate limitations to the scope of certain Reps and Warranties. For example, the scope of the Reps and Warranties can be limited or qualified by Materiality, knowledge, range or time, or by disclosing certain exceptions to the Reps and Warranties on the Disclosure Schedules.