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Rajah Lehal

Information in a brochure can be held against a seller

October 27, 2016

Information within a manufacturer’s brochure can act as a warranty. In several scenarios, the manufacturer will not be a party to the written contract; however, if the manufacturer publishes a brochure that includes information on a product that is then sold by a seller, that brochure is intended to be a sales tool, and the information within the brochure can be treated as a representation, and may also include a warranty.

Thus, if you are the manufacturer of a product, ensure that you are aware of the representations made within the promotional material that you publish. Murray v. Sperry Rand [1979 Ont HC] stands as precedent for these rules. In this case, the plaintiff bought farm machinery based on representations made within a brochure. The brochure was published by the manufacturer of the product, a third party to the transaction. The seller had not made the same representations as for the manufacturer, nor did the contract refer to the representations or the brochure. The plaintiff found that the farm machinery did not work as the brochure representations stated that it will. The court found that the manufacturer is said to have entered a collateral (secondary) contract with the buyer. The manufacturer’s brochure was intended to be a sales tool to entice buyers into entering into contracts with the sellers. It can be inferred from the court’s conclusion that when Party C makes a representation induce Party A into entering a contract with Party B , then the representation can draw Party C into a collateral contract with Party A and B.

Representations and Warranties
Case Law

Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.