Ready for more disclaimer talk? Today's post talks about disclaimers and their use in contracts. It fit in nicely with all the Draw the Law's talk on warranties.
Disclaimers are Exculpatory Clauses
In contract lingo a disclaimer is apart of group of clauses that are known as exculpatory. Exculpatory clays not only include disclaimers, but indemnification and waivers as well. I will cover those eventually, but just know that exculpatory works by reliving one or both parties to a contract from liability in certain circumstances.
Generally, an exculpatory clause will not be enforced by a court if the offending clause is extremely unfair (“unconscionable”) or it is against public policy. Sorry, there are just some liabilities that cannot be waived. This goes back to what I say a lot to clients and in this blog, an attorney can put down whatever you want, but that does not mean it is going to be enforced if there is a dispute.
However, this situation is usually in a one-sided agreement where one party was not able to negotiate the terms of the deal. This type of contract is known contract of adhesion. You are basically stuck with the terms of the deal because the other side has too much leverage in the negotiation. Typically, this situation is an average consumer versus a large corporation.
More on Disclaimers and an Example
Disclaimers are great contracting tools for limiting risk for a company when it is putting a product or service out there. Often times, when you do not know what the end results may be, such as behavior or actions by a consumer with a new product, you may want to limit damages, in particular a certain type, consequential damages. I will talk about damage types in another post. For now, just understand that a disclaimer can limit the amount of damage for injuries that might indirectly stem from the main harm in a breach of contract situation.
An example of a disclaimer is as follows:
Although the information and recommendations at this internet site are presented in good faith and believed to be correct, COMPANY X makes no representations or warranties as to the completeness or accuracy of the information.
Information is supplied upon the condition that the persons receiving same will make their own determination as to its suitability for their purposes prior to use. In no event will COMPANY X be responsible for damages of any nature whatsoever resulting from the use of or reliance upon information from this site or the products to which the information refers.
COMPANY X does not warrant the accuracy or timeliness of the materials on this site and has no liability for any errors or omissions in the materials.
THIS SITE IS PROVIDED ON AN "AS IS" BASIS. NO REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER NATURE ARE MADE HEREUNDER WITH RESPECT TO INFORMATION OR THE PRODUCTS TO WHICH INFORMATION REFERS.
I took this off a company's website, and just kept the name out, as to focus on the disclaimer itself. Notice that it accomplishes several things. It tells the reader the information is only presented on a "good faith" basis and there is no warranty for "accuracy." Also it is indicating to the reader if you rely on the information on the website you do so at your own risk. Lastly, it uses the disclaimer I talked about on Friday's post, "as is." Notice it disclaims the warranties that I discussed.
Anyway, why don't you take a peek at some of your products, websites, marketing materials, etc . . . and see what disclaimers are on those. You might be surprised. Finally, you can take a peek at my disclaimer at the end of this and every post.
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*Disclaimer: This post discusses general legal issues, but does not constitute legal advice in any respect. No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction. Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.