What is it?
A statement is a representation of fact that functions as evidence in legal proceedings. In contracts, it governs the accuracy of information provided and can trigger remedies if false.
statement
Contract LawLegal glossary term
Quick answer
Statement usually means a declaration of fact. In contracts, it matters because false statements can lead to fraud claims. Before signing, verify the accuracy of all statements and clarify any ambiguous language.
Definitions
What is statement?
Legal Definition
A statement in legal contexts is a formal declaration of facts that carries evidentiary weight. In contracts, a false statement can create liability for fraud or breach of warranty. The distinction between a statement of opinion versus fact is crucial in determining enforceability.
Plain-English Translation
A statement is like telling your teacher you finished your homework—when written and signed, it becomes something you're responsible for, whether true or false.
Contract relevance
Why statement matters in contracts
Misrepresenting facts in a statement can void a contract or create liability for fraud. The party making the statement bears the risk of being held accountable for its accuracy.
Document context
Where statement appears in documents
| Document type | Section | Why it matters |
|---|---|---|
| Loan agreement | Representations and warranties section | Defines borrower obligations |
| Lease contract | Property condition disclosures | Establishes landlord liability |
| SEC filing | Risk factors section | Required for material information disclosure |
| Affidavit | Court filing | Sworn statement of facts under penalty of perjury |
Contract language
Common contract wording
| Contract wording | Plain-English meaning | What to check |
|---|---|---|
| The Company represents that all statements contained herein are true and correct | The company claims these facts are accurate | Check if this includes only current facts or past statements |
| Statements made during negotiations are not binding | Verbal discussions won't be part of the final contract | Verify what's excluded from written statements |
| Material statements shall be in writing | Important information must be documented | Identify what qualifies as 'material' |
Red flags
Red flags to watch for
Wording examples
Clearer wording examples
Vague wording
Representations and warranties are true and correct
Clearer wording
'The Company represents and warrants that all statements contained in this section are true and accurate as of the date hereof'
Vague wording
Material statements
Clearer wording
'Statements that would reasonably influence a party's decision to enter this agreement'
Vague wording
Statements of opinion
Clearer wording
'Statements reflecting the Company's good faith belief or judgment on matters of fact'
Note: “clearer” means easier to read — not legally reviewed or guaranteed safe.
Pre-signature checklist
What to check before signing
1
Verify all statements with supporting documentation
2
Identify which statements are time-bound (current vs. historical)
3
Determine which statements have independent verification requirements
4
Check if any statements are qualified with limiting language
5
Confirm what consequences follow if statements prove inaccurate
6
Determine whether statements create ongoing obligations or warranties
Party impact
How statement affects each party
| Party | What this party should check |
|---|---|
| Buyer | Verify all seller statements about product quality and specifications with third-party testing |
| Landlord | Document property conditions before lease signing to limit liability for future claims |
| Borrower | Ensure loan statements accurately reflect financial status to avoid fraud claims |
| Insurer | Verify claimant statements with documentation before coverage determination |
Comparison
statement vs similar terms
| Related term | Plain meaning | Main difference from statement |
|---|---|---|
| Representation | Declaration of fact | More formal than a general statement, often in contracts |
| Warranty | Guaranteed promise | Creates ongoing obligation unlike a one-time statement |
| Puffery | Exaggerated sales talk | Not taken as seriously as factual statements |
| Opinion | Personal belief | Generally not actionable unless presented as fact |
Missing or vague
If statement is missing or vague
If statements are undefined or vague, parties may disagree on what constitutes a material representation. This can lead to disputes about whether false statements justify contract termination or damages. Ambiguity in what constitutes a 'statement' versus 'opinion' creates uncertainty about enforceable obligations. Parties may litigate whether vague statements satisfied disclosure requirements.
The lack of clear definitions can result in costly discovery battles over what statements were actually made.
Document map
Document section map
| Contract section | What to inspect |
|---|---|
| Definitions section | Identify which statements trigger representations and warranties |
| Representations and warranties section | Verify scope, time period, and materiality of statements |
| Disclosure schedules | Review all statements that must be separately verified |
| Indemnification clause | Determine which statements trigger indemnification obligations |
| Limitation of liability section | Check if statements are excluded from liability caps |
Visual model
Understand statement fast
An explainer image has not been generated for this term yet.
01
A lender's statement about a borrower's creditworthiness in a loan application
02
A landlord's statement about property conditions in a lease agreement
03
A manufacturer's statement about product safety in a warranty document
Document context
How statement shows up in legal documents
Why does it matter?
Misrepresenting facts in a statement can void a contract or create liability for fraud. The party making the statement bears the risk of being held accountable for its accuracy.
When does it matter?
A statement becomes legally significant when included in a signed contract or submitted as evidence in court. Within 30 days of discovering a false statement, a party may claim misrepresentation.
Where is it usually seen?
Statements appear in contract representations and warranties schedules, sworn affidavits in litigation, and financial disclosures required by SEC regulations and Sarbanes-Oxley compliance.
Who is affected?
The party making a statement risks liability for misrepresentation while the recipient gains the right to claim damages or contract rescission if the statement proves false.
How does it work?
First, a statement is made in writing or orally to convey information. Then, the recipient may rely on this statement in making decisions. If the statement is false and material, the recipient can seek remedies within the statute of limitations period.
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Wikipedia
External reference for statement
Open Wikipedia for broader background on statement.
Open on Wikipedia →Knowledge graph
Where statement connects to real contract work
This layer links the term to nearby glossary entries, document use cases, and contract-risk guides so readers can move from definition to context without dead ends.
Glossary
Use Cases
NDA
Legal & Corporate: Signing an NDA is easy. Understanding what you just agreed never to say is harder.
Purchase Order (PO)
Finance & Sales: A purchase order is a contract. Its terms govern your delivery, payment, and liability.
Bill of Lading (BoL)
Finance & Sales: Your cargo, your risk — unless the BoL says otherwise.
Source & disclosure
This page is an AI-assisted plain-English explanation based on LexPredict Legal Dictionary context and contract-review patterns. It is not legal advice. Meaning may vary by jurisdiction, industry, and exact clause wording.
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