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On the 20th of the "previous" month, a tenant signs a lease with a landlord for an apartment, to be occupied on the 1st of the following month, or immediately thereafter. The lease "warrants and represents" that the apartment will be broom clean, and fit for habitation on the first of the following month.

The tenant observes that the apartment is not "broom clean" because there is a lot of waste on the floor, and it is not "fit for habitation" because it is infested with rats, cockroaches, etc. The landlord said, "yes, I know, but we have ten days until the first of the month, and the apartment will be ready by then."

Come of the first of the month, the tenant wants to move in, but the landlord has not fixed the apartment, which is still dirty and "infested." That is to say, the landlord has not "made good" on the lease terms. Given that the key condition was a "representation and warranty" is the landlord "merely" guilty of breach of contract, or something more serious like fraud? And in any event, what are the tenant's likely rights if s/he goes to court?

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There is no fraud for breach of contract

That is, except in highly exceptional circumstances where the guilty party acted deceptively and dishonestly to obtain a benefit or cause harm - the landlord must have knowingly never intended to make good on their promise rather than simply failing to do so.

There is a difference between a warranty and a representation

The key difference between a representation  and a warranty is the remedy available to the receiving party.

A Representation is a statement of fact which is relied on by the receiving party and induces them to enter into the contract.  It is normally before the contract, but may be repeated in the contract as well.  A party may claim misrepresentation where a false representation has been made.  They may be entitled to rescind the contract, which means that the contract would be set aside and the receiving party may also be entitled to damages to put them back into the position they would have been had the contract never been entered into.

A warranty is a statement of fact contained in the contract.  If it is not true the receiving party has a claim for breach of contract.  If it is a fundamental breach the receiving party may have the right to terminate the contact in addition to a claim for damages.  However, unlike a claim for misrepresentation, the contract is not undone.

As tis is expressly both, the tenant has the choice of which remedy to peruse - void the contract and seek damages for misrepresentation or affirm (or attempt to terminate - it’s not clear that this breach is egregious enough to justify that) and seek damages.

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  • Perhaps I gave you the wrong set of (hypothetical) facts. Suppose the landlord had "represented and warranted that the apartment was fit for habitation on the 20th" (and the tenant had not seen that the place was "unfit.") The tenant discovers the "unfitness" on the first of the following month. Would that change your answer? – Libra Dec 9 '20 at 23:13
  • @Libra no. Although if it was fit on the 20th and became unfit between then and the 1st, that would. – Dale M Dec 10 '20 at 1:16
  • "If it was fit on the 20th and became unfit between then and the 1st, that would". be evidence of bad intent, right? If it were a due to a force of nature, the landlord has a duty to notify the prospective tenant, right? – Libra Dec 11 '20 at 20:47

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