Provision Database

Issue Introduction: Representations & Warranties

Agreements usually contain assurances or guarantees that certain statements of fact are true (“warranties”). Some warranties are applicable to most types of agreement, whereas others more context specific. It is important to consider the facts that are relevant for the purpose of a particular agreement in order to ensure that all parties make appropriate representations and warranties.

Questions to consider when developing representation & warranty provisions

  • Should the parties make any warranties, and if so, what is the scope?

Example approaches found in the MAPGuide

  • Most agreements in the MAPGuide include some general warranties such as:
    • The parties have the authority to enter into the agreement and will comply with all applicable laws.
    • A party has ownership of, or rights to, the intellectual property required for the agreement, and that they will not infringe the intellectual property of another party.
  • Some warranties that are mainly applicable to agreements for the supply of a product include that the supplier:
    • Will comply with Good Manufacturing Practice and applicable pharmacovigilance regulations.
    • Is not under any obligation to a third party that would conflict with the fulfillment of the delivery schedule.
    • Will deliver products that are in compliance with the agreed specifications, are free from defect, and have a specified minimum shelf life.
    • Will maintain a business continuity plan.
    • Has sufficient warehousing and manufacturing capacity that is compliant with the required standards.
  • Some warranties that are mainly applicable to product development funding agreements include that the developer will:
    • Use all reasonable and diligent efforts to fulfill its obligations under a project agreement.
    • Continue activity in lines of business needed to complete agreed projects and to fulfill global access commitments made under the agreement.
    • Be the sponsor of all project-related clinical trials, registrations and marketing authorizations.