Legal Definitions - representation

In legal terms, a representation refers to a statement or assertion of fact made by one party to another. This statement can be communicated through words or actions and is often intended to persuade the other party to take a particular course of action, especially to enter into a contract or agreement.

It is essentially a declaration that a certain fact or state of affairs exists, which the recipient is expected to rely upon when making a decision.

• Example 1: Real Estate Transaction

  Imagine a homeowner selling their house. During negotiations, they tell a potential buyer, "The plumbing system was completely replaced two years ago, so you won't have any issues there." This statement is a representation of fact about the house's condition. The homeowner intends for the buyer to rely on this information when deciding whether to purchase the house and at what price.

• Example 2: Business Partnership

  Consider a situation where one entrepreneur is trying to convince another to invest in their startup. The first entrepreneur states, "Our company has secured binding contracts with three major clients, guaranteeing revenue for the next two years." This assertion about the company's client base and revenue is a representation. It is made to induce the potential investor to commit funds, relying on the truthfulness of that statement.

• Example 3: Insurance Application

  When applying for car insurance, an individual fills out a form and checks a box indicating, "I have not been involved in any accidents in the past five years." This declaration is a representation. The insurance company relies on the accuracy of this statement to assess the risk and determine the premium. If the statement is later found to be false, it could impact the validity of the insurance policy.