Purpose of representations and warranties in a project finance transaction

Under general contract law, representations and warranties differ in meaning:

1. •

   representations are pre-contractual statements of fact made by a party to a contract which induce another party to enter the contract—if a Representation is incorrect or misleading, it may give rise to a claim for misrepresentation under general law, the remedy for which will be rescission and/or damages depending on the type of misrepresentation

2. •

   warranties are terms of the contract, breach of which will give the innocent party a right to sue for damages but not rescind the contract

For more information, see Practice Note: Representations