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What is the significance of the words ‘warrants’ and ‘undertakes’ in a contractual obligation?
Published on: 20 August 2018
An undertaking is a promise that one party will do something in the future whereas a warranty is a promise that a present fact or circumstance is true. Unlike a breach of a warranty, the breach of an undertaking may give rise to a claim for specific performance and injunctive relief.
Background
The words ‘warrants’ and ‘undertakes’ are often used as a single grouped concept. However, they are not interchangeable. Each has different temporal characteristics and different remedies. Understanding the differences between them and using them appropriately can be important to ensure that the correct remedies attach to the appropriate terms in an agreement. (For more details and other key terms, see Practice Note: Contract interpretation—conditions, warranties and intermediate terms).
In essence, an undertaking is a promise that one party will do something in the future whereas a warranty is a promise that a present fact or circumstance is true. In a real estate contract, a seller may warrant that there are no defects
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Jurisdiction(s):
United Kingdom
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Key definition:
Warrants definition
What does Warrants mean?
Also known as share warrants or equity warrants. A certificate or other document that gives the holder the right to subscribe for shares at an agreed price. See also option.
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