representation
Definition
A representation is a statement of fact that one party makes to another to convince them to enter into a contract or business deal. If that statement turns out to be false, the party who relied on it may have legal grounds to cancel the contract or sue for damages.
Example
A seller tells you their restaurant has averaged $500,000 in annual revenue for the past three years, and you buy it based on that claim, only to discover the real number was $200,000.
Watch Out
Always get important representations in writing because a verbal promise that turns out to be false is much harder to prove in court.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.