10 Questions
In common law, what are representations?
Statements of a past or present fact intended to induce reliance
What are the requirements to sue for fraudulent misrepresentation?
The seller had to know the statement was false, the buyer had relied on it, and the reliance was justifiable
What are the usual remedies for innocent and negligent misrepresentation?
Avoidance (cancel the contract) and restitution (compensation)
In civil law, what is the requirement for both reps and warranties?
Both require knowledge (the recipient has to have relied on it)
What is the purpose of reps and warranties in contracts?
To set out a liability regime and allocate the risks
What is the purpose of a materiality qualifier in a qualified representation and warranty?
To allow for flexibility and recognize that not every minor deviation should give rise to a breach
What is the function of a knowledge qualifier in a qualified representation and warranty?
Limits the representation to the knowledge of the seller
What is the purpose of a covenant in a contract?
To create a duty to perform or not perform something
What distinguishes a condition precedent from other types of conditions in a contract?
It is an event or condition that must occur before a party's obligation to perform arises
How does a cap limit the liability in a contract?
By setting a maximum amount for which a party is liable
Test your knowledge of contract law goals, such as memorializing business deals, clarity, problem resolution, flexibility, and litigation prevention. Explore the concept of reps and warranties and their role in liability allocation. Ideal for law students and legal professionals.
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