These contract drafting terms both essentially mean the same thing, albeit from differing viewpoints. A covenant is simply a promise or an obligation to do or not do something. A contract right is the obligation of the other party to do or not something for the party that holds the right. If there is a duty or obligation to perform then there must a correlative right to receive that performance. A covenant is drafted from the viewpoint of the actor, wherein a right is drafted from the viewpoint of the recipient. Covenants are correctly drafted using the word “shall” as in “X shall do so and so”, and rights are delineated by various words such as “entitled, is to be, shall receive, etc.” Rights use more passive language and contain inherent ambiguities, thus they are generally to be avoided in drafting. For instance, if one inserts a right into a contract without naming the obligor of that right, then an ambiguity may exist as to which party must perform that obligation; is it the other party to the contract or a third party?
The remedies for breach of a right or a covenant are essentially the same. The non-breaching party may sue and in some cases seek specific performance, which is an order by a court that a party must perform the obligation specified in the agreement. The measure of damages is the benefit of the bargain, meaning that the aggrieved party is entitled from the party who breached the contract to everything that he would have received, including profits, if the breach had not occurred. If the breach cannot be cured, then the aggrieved party may have the right to void and rescind the agreement.
A breach of a covenant legal action does not require a breach of any representation, because this would be determined to have been breached or not breached at the time the representation was made; therefore, if any representation(s) were true at the time they were made, and a covenant or right was breached at any point in the future then only an action for breach of a covenant or right would exist, and possibly a breach of warranty.
To provide an example, when selling a vehicle, the seller represents that the vehicle is pink, which is in fact the case at the time of the representation, and furthermore the seller covenants not to change the color of the vehicle before the transfer (seller shall not change the color of the vehicle”), while actually painting it blue before delivering it to the buyer. In this instance there would only lie an action for breach of a covenant and not for breach of a representation because the statement was true at the time it was made. If a warranty were to be included along with the representation then an action for breach of warranty would properly lie as well.
