Book contents
- Frontmatter
- Contents
- Preface to the Third Edition
- Preface to the Second Edition
- Preface to the First Edition
- PART ONE AN INTRODUCTION TO PROJECT FINANCE
- PART TWO RISK IDENTIFICATION, ALLOCATION, AND MITIGATION
- PART THREE PROJECT FINANCE STRUCTURES
- PART FOUR TECHNICAL, POLITICAL, AND ECONOMIC FEASIBILITY
- PART FIVE PROJECT FINANCE DOCUMENTATION
- CHAPTER TWELVE AN OVERVIEW OF PROJECT DOCUMENTATION
- CHAPTER THIRTEEN REPRESENTATIONS AND WARRANTIES IN PROJECT FINANCE CREDIT AGREEMENTS AND CONTRACTS
- CHAPTER FOURTEEN PRELIMINARY HOST-COUNTRY AGREEMENTS
- CHAPTER FIFTEEN CONSTRUCTION CONTRACTS
- CHAPTER SIXTEEN INPUT CONTRACTS
- CHAPTER SEVENTEEN OPERATION AND MAINTENANCE AGREEMENTS
- CHAPTER EIGHTEEN PROJECT FINANCE OFF-TAKE SALES CONTRACTS
- CHAPTER NINETEEN POWER SALES AGREEMENTS
- PART SIX CREDIT ENHANCEMENT
- PART SEVEN DEBT AND EQUITY FINANCING
- PART EIGHT COLLATERAL
- PART NINE PROJECT SPONSOR AND INVESTOR AGREEMENTS
- PART TEN SPECIAL TOPICS IN PROJECT FINANCE
- Appendix A A Checklist of Due Diligence Considerations for a Project Financing
- Appendix B UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects
- Project Finance Terms, Abbreviations, and Acronyms
- Select Bibliography
- Index
CHAPTER THIRTEEN - REPRESENTATIONS AND WARRANTIES IN PROJECT FINANCE CREDIT AGREEMENTS AND CONTRACTS
from PART FIVE - PROJECT FINANCE DOCUMENTATION
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Preface to the Third Edition
- Preface to the Second Edition
- Preface to the First Edition
- PART ONE AN INTRODUCTION TO PROJECT FINANCE
- PART TWO RISK IDENTIFICATION, ALLOCATION, AND MITIGATION
- PART THREE PROJECT FINANCE STRUCTURES
- PART FOUR TECHNICAL, POLITICAL, AND ECONOMIC FEASIBILITY
- PART FIVE PROJECT FINANCE DOCUMENTATION
- CHAPTER TWELVE AN OVERVIEW OF PROJECT DOCUMENTATION
- CHAPTER THIRTEEN REPRESENTATIONS AND WARRANTIES IN PROJECT FINANCE CREDIT AGREEMENTS AND CONTRACTS
- CHAPTER FOURTEEN PRELIMINARY HOST-COUNTRY AGREEMENTS
- CHAPTER FIFTEEN CONSTRUCTION CONTRACTS
- CHAPTER SIXTEEN INPUT CONTRACTS
- CHAPTER SEVENTEEN OPERATION AND MAINTENANCE AGREEMENTS
- CHAPTER EIGHTEEN PROJECT FINANCE OFF-TAKE SALES CONTRACTS
- CHAPTER NINETEEN POWER SALES AGREEMENTS
- PART SIX CREDIT ENHANCEMENT
- PART SEVEN DEBT AND EQUITY FINANCING
- PART EIGHT COLLATERAL
- PART NINE PROJECT SPONSOR AND INVESTOR AGREEMENTS
- PART TEN SPECIAL TOPICS IN PROJECT FINANCE
- Appendix A A Checklist of Due Diligence Considerations for a Project Financing
- Appendix B UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects
- Project Finance Terms, Abbreviations, and Acronyms
- Select Bibliography
- Index
Summary
GENERALLY
Facts are important in any business transaction. In a project financing, however, an understanding of the details of a project is crucial to proper structuring of each of the project contracts and the financing arrangements. Any unverified fact is the potential weakness of a project, for uncertain facts may lead to unpredictable results.
In contracts, facts are traditionally memorialized in the representations and warranties section. It is here that the contracting parties in a project financing can determine whether the elements necessary to support a project financing exist. Thus, the representation and warranty section of project contracts, including the project loan agreement, serves an important role in the project due diligence process.
Definition
Representations and warranties form the basis of most business transactions, including a project financing. A representation is a statement by a contracting party to another contracting party about a particular fact that is correct on the date when made. A representation is made about either a past or a present fact but never a future fact. Facts required to be true in the future are covenants.
A warranty is sometimes confused with a representation, but in practice, the two terms are used together, the contracting party being asked to “represent and warrant” certain facts. As an oversimplification, a warranty is a duty created in a contract; a representation induces a party to enter into a contract and can exist even though no valid contract is created. A contractual warranty, therefore, is a guarantee that a given fact will exist as warranted at some future date.
- Type
- Chapter
- Information
- The Law and Business of International Project FinanceA Resource for Governments, Sponsors, Lawyers, and Project Participants, pp. 121 - 138Publisher: Cambridge University PressPrint publication year: 2007