Representation
A statement of fact made to induce a party to enter into a contract.
Definition
A representation is an assertion of fact made before or at the time of contracting that induces the other party to enter the agreement. If it turns out to be false, remedies may include annulment or damages, depending on whether it was innocent, negligent, or fraudulent. Dutch law has no separate concept of a "representation"; a false pre-contractual statement is usually addressed through error (dwaling) under article 6:228 or fraud, and parties often convert key statements into express warranties.
Example
A seller represents that a company has no pending litigation; if that is false and material, the buyer may annul the share purchase for error.
Why this is a business risk
Representations made during due diligence or negotiations can have binding legal effect even if they are not converted into warranties. A company that makes overoptimistic statements about its technology, finances, or IP ownership, and relies on an entire-agreement clause for protection, may find Dutch courts willing to look past it where the statement was material and induced the deal.
How to manage it
- Convert important pre-contractual statements into express warranties so their content and remedy are clearly defined.
- Train your team to avoid off-the-cuff statements about product capabilities or company status in negotiations: these can become representations.
- Keep records of what was said during due diligence and negotiation: if a representation claim arises, documentation of what was actually communicated is essential.
Legal references
Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.
Frequently asked questions
Common questions about this term.