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Contract Glossary

Breach of Warranty

Definition

A breach of warranty occurs when a promise or guarantee made in a contract turns out to be false or unfulfilled. Unlike a breach of contract (failing to do something), a breach of warranty means a representation about the state of things — quality, condition, ownership, or compliance — was wrong. The other party can claim damages for the gap between what was promised and what was delivered.

In Practice

A software vendor's contract warrants that the platform 'processes transactions in compliance with PCI-DSS security standards.' Six months in, an audit reveals the platform doesn't meet PCI-DSS requirements and never did. That's a breach of warranty — the vendor promised a state of affairs (compliance) that wasn't true. You can claim damages for the cost of remediation, the audit, and any fines from your payment processor.

Frequently asked questions about breach of warranty

A breach of contract is a failure to perform an obligation — you didn't deliver the work, didn't pay on time, or didn't show up. A breach of warranty is a false representation — you said the product was certified, but it wasn't. The distinction matters for damages: breach of contract damages are based on what performance would have been worth. Breach of warranty damages are based on the difference between what was promised and what was delivered.

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This content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.