Corporate & Securities Law

“Represents, Warrants, Covenants and Agrees”

By Ken Adams

I received the following cry of despair from a Canadian reader:

I’m preparing a partnership agreement and have been given precedent to work with. Using MSCD, I have spent some time trying to rework the precedent’s archaic language to make it more readable. It says, several times, “Each of the Partners severally represents, warrants, covenants and agrees with each other Partner that such Partner (a) has the capacity to enter into the agreement, (b) shall ensure that its status shall not be modified,” etc.

I’m not sure how to tackle the wording in bold italics. I’ve looked at four other partnership agreements and the same quadruplet wording appears in various places in each agreement. Is it used for belt and suspenders purposes, or just because no one has any idea what to say? I’ve looked at your book, and I see that you have tackled covenants and agrees to, but it is a bit daunting to read two couplets side by side. And the drafter obviously thought this language was important. What do you recommend I do with it?

Here’s my reply:

The initial question is, what one or more categories of contract language follow “represents, warrants, covenants and agrees”? The example you cite consists of (1) language of representation and (2) language of obligation imposing a duty on the subject of the sentence. In an ideal world, for the former you’d say “Acme represents” and for the latter you’d say “Acme shall.” Your language is clumsy because it jams the two concepts together and also adds redundancy.

Regarding the redundancy, you’ve noted MSCD’s discussion of covenants and agrees to. MSCD also discusses represents and warrants, but click here for a recent blog post that looks at it from a Canadian perspective.

And look at what my book says about joint and several. Several is a liability concept; it doesn’t make sense to have anyone “represent severally.”

I hope this helps!

Full post as published by AdamsDrafting on June 18, 2009 (boomark / email).