What is a “Disclaimer of Warranty”
A disclaimer of warranty is a legal document in which someone disclaims, or gives up, certain legal rights. In the context of a contract, a disclaimer of warranty is an agreement between two or more parties in which one party forgoes their right to sue the other for any losses due to a breach of warranty. Depending upon the specific language used, a disclaimer of warranty may effectively limit or remove one party’s liability for damages from a breach of the contract.
The Purpose of a Disclaimer of Warranty
The purpose of a disclaimer of warranty is twofold. First, it serves to protect one party from legal action by another, if the contract is breached. Second, it lets the party relying on the disclaimer know exactly what level of responsibility the party disclaiming participation assumes. If a disclaimer of warranty is incorporated into a contract, it can help a party to be sure that they know the limits of another party’s duty or obligation to them if the terms of the contract are not met.
Types of Disclaimers
Although certain types of disclaimers of warranty are considered unenforceable, it should not be assumed that this is always the case. There are several types of disclaimers that are commonly seen in a number of different contexts:
1. Express Disclaimer of Warranty: This is a direct, explicit statement in a contract that disclaims any warranties between the involved parties.
2. Implied Disclaimer of Warranty: This type of disclaimer is implied by the way in which a contract is structured, but does not contain any explicit language that explicitly disclaims warranties.
3. Limited/Strict Disclaimer of Warranty: This type of disclaimer is used to limit or remove certain warranties or liabilities of the party disclaiming them.
4. General Disclaimer of Warranty: This type of disclaimer is used to state that a party is not responsible for any losses or damages caused by a breach of the contract.
5. Mutual/Two-Way Disclaimer of Warranty: This type of disclaimer is used to indicate that both parties disclaim any liability for losses or damages due to a breach of the contact.
Using Disclaimers of Warranty in the United States
In the United States, there is no uniform law governing disclaimers of warranty; the law varies from state to state. Most states have adopted the Uniform Commercial Code, which contains some provisions related to disclaimers of warranty, but states are free to incorporate changes to this law as necessary. Additionally, some states may have opted out of incorporating some or all of the provisions contained in the UCC in their own statutory laws.
When using disclaimers of warranty in the United States, it is important to ensure that a disclaimer of warranty is properly drafted. In some cases, an improperly or overly broad disclaimer may be found to be invalid and unenforceable. Additionally, it is important to ensure that any disclaimers of warranty are consistently applied throughout a contract, as inconsistency may result in the entire disclaimer being invalid and unenforceable.
When drafting disclaimers of warranty, it is also important to ensure that they are not overly broad or vague. Courts have tended to invalidate overly broad disclaimers of warranty, and have also invalidated certain specific disclaimers and clauses as being overbroad. For example, some courts have invalidated clauses that attempt to limit specific forms of damages, such as mental anguish, criminal acts, and punitive damages. Additionally, clauses that attempt to limit the liability of one party for any and all losses associated with a contract breach are generally held to be unenforceable.
Finally, when drafting disclaimers of warranty, it is important to ensure that they are properly incorporated into a contract. Generally, disclaimers of warranty must be included in the main body of the contract itself, rather than as an attachment or addendum. Additionally, the parties to the contract must have the opportunity to review and accept the terms of the disclaimer of warranty in order for it to be valid and enforceable.
Conclusion
Disclaimer of warranty is an important tool in contract law. By properly drafting, incorporating, and consistently applying disclaimers of warranty, parties to a contract can help to limit or remove their liability for damages in the event of a breach of the contract. Additionally, disclaimers of warranty can help to preserve the rights of the parties to know exactly what responsibilities the other assumed in entering into the contract. However, in order for a disclaimer of warranty to be effective, it must be properly drafted, incorporated, and applied.
