Why are service or maintenance contracts called &#39;warranties&#39;, when they legally aren&#39;t warranties? The expression 'warranty' legally signifies? Please select all that apply. a term of a contract as opposed to a representation. The term 'warranty' is used to distinguish between a term (warranty) and a mere representation, and also to distinguish between terms that give no right to termination upon breach (warranties) and terms that do (conditions). Service contracts for electrical and similar items are not really good examples of the use of 'warranty' in the legal sense, although they are, of course, separate contractual agreements (for which one pays, often heavily), containing a number of terms providing for what will happen if a fault develops. Reference: Sections 5.1.2, 5.4.1 If warranties legally don't signify service or maintenance contracts, which are misstated as Warranties, then how do the legal definition of &quot;warranty&quot; relate to service or maintenance contracts? Why did corporations start misnaming service or maintenance contracts Warranties?
Because English loves homophones A lot of words in English have more than one meaning. The current front runner is run with 645 definitions in the OED. Understanding English requires more than knowing the definitions, it requires understanding the context. Warranty in a contract law context means a term the breach of which does not justify terminating the contract. Or a term of a contract rather than a representation about the contract, depending on context. Warranty also has a common meaning that makes it a synonym of guarantee. It can also mean a court order calling for the arrest of someone (an arrest warrant) or to search a premises (a search warrant). It can also mean the authorization from the government to act as a high ranking NCO in a military service - NCOs hold warrants, officers have commissions. Among others ...
A promise that a court would not enforce by injunction can still be valid consideration and be part of a valid contract. Failure to carry out such obligations would lead to some measure of money damages, most likely. On the other hand, provisions specifically barred by law, or against public policy, such as a promise to commit a crime, are void from the start, and form no part of a valid contract. Such provisions may be treated by a court as if they had just been left out, or if they were essential to the contract, or formed the sole consideration, the whole contract might be considered void. If a term is too vague for a court to determine if it has been violated or not, the court may try to clarify it, or may just ignore it. Just what it would mean for a tenant to "undermine the leadership" of a landlord is not clear to me, at least. That might well be held to be "too vague". As to "not complain" it may be that a tenant has a legal right to make official complaints, which cannot be waived by contract. Or it may not, depending on the local laws.
I had a contract with a company, but that company changed its name. Is my contract still enforceable? Yes, because what matters is the entity itself. A contract is not stricken merely because one or more parties changed names or labels.
Yes There is no general legal prohibition on perpetual contracts. What you describe is not a perpetual contract A perpetual contract is one where at least one parties obligations are indefinitely ongoing and there is no mechanism in the contract (outside breach or repudiation) for terminating it. The contract you describe has a mechanism for termination albeit only available to one party. Perpetual contracts can be entered into knowingly and willingly - most perpetuities, where a person leaves the income on an investment to a university or charity forever subject to conditions, are of this type. Or they can be entered into accidentally, for example, a fixed term contract with an automatic renewal where the renewal term is not specified is a perpetual contract. The important point is there must be no explicit mechanism in the contract for bringing the contract to an end for it to be a perpetual contract. In commercial arrangements, courts may imply a term that the parties can terminate on reasonable notice but this is subject to all the normal limitations. Your example As described, because there is an explicit term allowing termination, this is not a perpetual contract. Such a contract would be subject to the normal common law doctrine of unconscionably (which it almost certainly is) and, in some jurisdictions, consumer protection laws against unfair contract terms.
A contract need not be written to be valid and enforceable. However, if there is no written contract, then in a dispute the burden of proving (via a preponderance of evidence) a contractual obligation falls on the party asserting it. In the scenario you describe it sounds like that would be impossible for the processing company.
Such a right would only exist if the legislature has created it by some act. Insurance is excluded under the class of covered contracts under The Consumer Protection (Distance Selling) Regulations 2000 (see schedule 2), and The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. The only restriction on automatical renewal clauses under Consumer Rights Act 2015 is that the deadline for objecting to renewal cannot be unreasonably early (schedule 2, unfair terms); and in general, the terms may not be vague. Since there is no law restricting a contract from requiring written notice, or telephone notice, or whatever they demand, then it comes down to what the contract says. If it says &quot;you must call&quot;, then you must call.
If I may paraphrase the scenario: The customer has a contract with the insurer The customer is contemplating undergoing a certain procedure and is unsure if it is covered under the contract The customer calls the insurer to ask this specific question The insurer says "yes" The customer undergoes the procedure The insurer refuses to pay on the ground that it is not covered under the contract. Let's put aside issues of evidence and what can be proved and assume these facts are not in dispute. There is no question that the contract has been renegotiated; it hasn't. This avoids the necessity of considering if the insurer's employee has the authority to do this or it the customer can rely that they do even if they don't. There are two possibilities: The procedure is covered and the insurer must pay under contract The procedure isn't covered and the insurer must pay under the tort of negligent misstatement. The insurer is vicariously liable for the actions of its employee. The insurer owes a duty of care to a customer who asks such a question to answer it correctly. It is foreseeable that the customer would act on the insurer's advice and incur costs that they may have avoided if the correct advice had been given. Nothing is ever certain in the law but this is as close as you can get.
What is a representation and why are they put in contracts? From a practical perspective, a contractual representation is a statement of fact in a signed writing made at an easily provable time that, if false, will support a claim for fraud upon showing the other elements of a claim for fraud that are not also included elsewhere in the contract (e.g. knowledge of falsity, the other party's lack of knowledge of falsity and damages). Some other elements of a common law fraud claim (e.g. publication of the statement to the other party, justifiable reliance, and materiality) are often also established on the face of contract that contains representations identified as such. In a close case, the classification of a statement as a &quot;representation&quot; may also tip the scales if the status of a statement as a statement of a presently existing fact (which a representation must be to be actionable in a fraud action) is disputed. If a representation concerning a key fact foundational to the contract is not true, that might provide a basis to rescind the contract based upon mutual mistake (even if it doesn't amount to fraud). Proof that a false representation was intentionally false may give rise to claims for punitive damages and a right to rescind the contract in addition to a claim for compensatory damages. Representations in a contract also simplify the proof of preliminary facts like the place of incorporation of the signing party, the addresses of the parties, the authority of the person signing it to do so, the fact that someone is not in military service, etc., in a lawsuit arising from the contract on any theory. Sometimes a representation will &quot;estop&quot; a party from asserting something contrary to that representation in litigation. For example, if the seller represents that the transaction is a consumer transaction, and then tries to say that a consumer protection act claim does not apply because it is not a consumer transaction later on in court, when a dispute arises from the transaction, this argument contrary to the representation in the contract is likely to be summarily dismissed based upon that representation. As another example, a party might represent that they agree that $500 an hour is a reasonable fee to pay an attorney in the event that a dispute arises under the contract and a prevailing party in litigation becomes entitled to attorneys' fees, which might reduce litigation over whether a party's attorneys are charging reasonable rates in that context. Similarly, a contractual representation concerning authority to sign is binding on the party for which the signature is made, even if that person doesn't actually have the authority to do so under what is known as the &quot;apparent authority&quot; doctrine in agency law. And, representations often provide context for the transaction that make it easier to interpret other provisions of the contract that would otherwise be ambiguous. For example, a representation that a transaction is being entered into solely for economic business purposes may help a court decide what other representations and disputes are and are not material to the parties, and might cause a court to decide that non-economic damages (i.e. emotional distress) should not be allowed even with respect to fraud claims arising from a misrepresentation (since non-economic damages are as a default rule allowed in connection with fraud claims in many jurisdictions). What are warranties and covenants and why are they put in the contracts? A warranty or covenant is a promise that something will be the case for which there is a remedy if it is not true, without regard to fault on a strict liability basis. Relief for a breach of warranty is generally limited to compensatory damages if breached, and would not generally provide a ground to rescind a contract, but a breach of warranty claim much easier to prove in court because it often doesn't require nearly as much evidence to prove in court as a fraud claim. The evidence beyond the contract itself in a breach of warranty claims is usually in the possession of the aggrieved party prior to bringing a lawsuit. In a fraud claim based upon a representation, in contrast, some of the facts that must be proved to prevail in court (e.g. the knowledge of the person making the statement at the time that the statement was false) can usually only be obtained from testimony or out of court statements from an opposing party, or made to an opposing party. Why call something both a representation and a warranty? One both represents and warrants something in a contract so that both sets of remedies are available if the statement proves to be incorrect. There is an easy to litigate remedy of money damages if the statement is not true, and harder to litigate fraud remedies if the statement meets the additional conditions. Other Fine Points N.B. There are other kinds of contract terms in addition to representations and warranties, such as conditions precedent. But, they are beyond the scope of the question and usually don't appear in a representations and warranties (a.k.a. &quot;reps and warranties&quot;) section. A slightly less common phrase is &quot;represents, warrants and covenants&quot;, with the notion being that a warranty usually concerns something that you are promising is true at the time that the contract is signed, while a covenant is something that you promise will be true in the future or on an ongoing basis (sometimes running with the land when real estate is concerned). So, you might &quot;warrant&quot; in a sale of real estate contract that the house you sold someone is free from defects and &quot;covenant&quot; that you will forever refrain from building any other building in a subdivision that impairs its view of the mountains. Or, you might warrant in a corporate bond contract that no more than 5% of a borrower's accounts receivable are currently overdue, and covenant that you will never let more than 10% of the borrow's accounts receivable enter overdue status. But, in modern American English legal writing, the distinction between a warranty and a covenant has largely collapsed and even many sophisticated big business contract lawyers no longer use &quot;represents, warrants and covenants&quot; language in their contracts.