How to Avoid Liability for Your Clients' Representations

It is normal for clients to make representations in contracts, in agreements and in discovery in litigation. These representations can find their way into settlement agreements, agreements for the purchase and sale of residential and commercial properties, answers to interrogatories, and guaranties. The representations might occur in numerous ways, including those in binding agreements. However, the act of drafting an agreement for a client does not make the attorney responsible for the accuracy of the statements placed on paper. The attorney puts into writing the representations that the parties to the agreement intend to make to each other. This article will examine these situations and explain why attorneys do not have liability for their clients’ representations in contracts, agreements and throughout litigation.

With every aspect of litigation, attorneys represent clients who may have different degrees of business and legal acumen. Some clients have never faced litigation before, and completely defer to the advice of counsel regarding strategy, while other clients, especially in complex commercial litigation or professional malpractice cases, have significant experience in the field. In either situation, clients make certain representations, to both their attorney and their adversary that will support their position in a case or in a contract. These representations might include the credit worthiness of the client in connection with the sale of a property, representations made in the process of settling a case, or representations made in prenuptial agreements. However, attorneys, when drafting documents, are not necessarily liable for representations made by the client. As Judge Chesler noted in Wiebel v. Morris, Downing & Sherred, 2009 U.S. Dist. 46088 LEXIS (D.N.J. June 2, 2009), aff’d, (3^rd Cir. June 10, 2010):

[T]o find otherwise would create an entirely new category of liability for the legal profession: it would impose on an attorney a duty of care with regard to all content in the agreements they draft, and attorneys would effectively become guarantors of every representation when they memorialize agreements.