This early blog posting on warranties was praised for its illustrations. Is that like getting points in a school essay for neat handwriting?
This is the first of an occasional series highlighting IP Draughts’s “favourite” one-sided provisions in contracts. These provisions are often found in contracts where there is an imbalance of power between the parties, as in many financing transactions, and where the party with the power (let us call him the “Patron”) seeks to reduce a sometimes theoretical risk by imposing it on the other party (the “Supplicant”).
Today’s one-sided term is:
The Supplicant represents and warrants that the terms of this Agreement are legally binding upon it.
The risk being addressed here is that the other, one-sided terms of the contract are not enforceable, perhaps because they are so extreme that a court could not bring itself to enforce them, or because despite the Patron’s “no expense spared” attempts to make the contract watertight, his lawyers have overlooked some loophole.
Sometimes, the clause goes on to state that it does…
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