Draw the Law, People Issues XIV: Disclaiming Warranties

Hey contract junkies you are in luck this week’s Draw the Law and next week’s Boilerplate Blurb will give you a double shot of disclaimer information. If you are a small business owner drafting your own agreements or have an attorney doing them for you, you definitely want to have an idea about what are the expectations a customer is supposed to have about your product. One way you manage those expectations is through disclaimers of the warranties I discussed last post.

Requirements of a Disclaimer

Recall that warranties of merchantability and fitness for a particular purpose means that the seller is saying that their product will do what it is supposed to do and it will serve a particular role. Many times salespeople or advertising may puff a product a little too much, and the maker or seller needs to dial that back. They will use a disclaimer to cut off those warranties. A for a disclaimer to be effective it MUST BE the following:

  • Clear;
  • Unambiguous;
  • And if written, conspicuous.

Therefore, when you read those encyclopedia agreements notice that the text and font changes to all CAPS (like so), that is definitely the drafters way to call your attention there. In many occasions one of those bolded, all caps provisions will be a disclaimer.

Specifics of Disclaiming Warranties

Here are some specifics when trying to disclaim the warranties I discussed last week:

  • In the case of a warranty of merchantability (either expressed or implied) it can be disclaimed through oral or written means.
  • However, for an implied warranty of fitness for a particular purpose the disclaimer MUST be in writing.
  • If you use Ebay or Craiglist for all your goods purchases you will probably see these phrases a lot “as is” or “with all faults.” Why? They are disclaimers that BOTH work against the implied warranties of merchantability and fitness for a particular purpose (in most cases).
  • You cannot disclaim a warranty after the buyer has purchased your product. Basically, that would defeat the purpose of consumer protection laws. Consider, how it feels after you get something, and then someone says “Oh yeah, by the way, I forgot to mention . . .” The law would like to avoid those kinds of deals.

Finally, you should realize that there are some things you cannot disclaim. One of the primary things a manufacturer and retailer always want to think about with products is their safety when used by the public, in particular in the context of quality control. Why?Any personal (physical) injury that is caused by a product’s defect will result in damages for the injured customer. This is a responsibility that one cannot disclaim.

Hope you enjoyed today’s Draw the Law, and remember to check back on Monday for more on Disclaimers with Boilerplate Blurb. Some examples will be given.

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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.