Declaration: Overview, definition, and example
What is a declaration?
A declaration is a formal statement or assertion made by one party in a legal or contractual context, confirming specific facts, rights, or obligations. Declarations can be included in contracts, legal filings, or official statements to provide clarity, establish intent, or confirm compliance with laws or agreements.
For example, in an employment contract, an employee may be required to sign a declaration stating that they have disclosed all potential conflicts of interest before starting work.
Why is a declaration important?
A declaration is important because it serves as a legally recognized statement that can be used as evidence in disputes, audits, or legal proceedings. It helps ensure transparency, accountability, and compliance with contractual terms.
For businesses, including declarations in agreements helps protect against misrepresentations, fraud, and breaches of contract by requiring parties to formally acknowledge key facts or obligations. Declarations are commonly used in finance, employment, regulatory filings, and court proceedings.
Understanding a declaration through an example
A company enters into a merger agreement and includes a declaration from both parties stating that all financial statements provided are accurate and complete. This ensures that both companies are transparent about their financial health before finalizing the deal.
In another case, a real estate buyer signs a declaration confirming that they have conducted due diligence on the property and accept its condition. This prevents the buyer from later claiming they were unaware of potential issues.
Example of a declaration clause
Here’s how a declaration clause might appear in a contract:
“Each Party hereby declares and warrants that all statements, representations, and disclosures made in connection with this Agreement are true, complete, and accurate to the best of their knowledge. Any misrepresentation may result in termination of this Agreement or legal consequences as permitted by law.”
Conclusion
A declaration serves as a formal acknowledgment of key facts or obligations in legal and contractual matters. It ensures transparency, reduces legal risks, and provides enforceable statements that can be referenced in disputes or compliance matters. Including a well-drafted declaration clause in contracts helps businesses confirm intent, protect against misrepresentation, and establish accountability in agreements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.