A warranty disclaimer is the clause that switches off the implied promises the law would otherwise read into a deal. By default, contracts for goods carry implied warranties of merchantability and fitness for a particular purpose; a disclaimer removes them and limits the seller to whatever express warranties it chose to give. The catch is that the disclaimer only works if it is conspicuous and uses the right words, and even then some warranties cannot be disclaimed at all.
TL;DR
- A warranty disclaimer removes implied warranties (merchantability, fitness for a particular purpose) and confines the buyer to the seller's express warranties. "As-is" is the strongest common form.
- To disclaim implied warranties in a sale of goods, the disclaimer usually must be conspicuous (capitalized or bold so a reasonable person would notice it), and disclaiming merchantability often requires the word "merchantability."
- You cannot disclaim everything. Express warranties you actually made, fraud, and many consumer-protection and statutory warranties survive a disclaimer.
- Pair the disclaimer with a tight express warranty and a limitation of liability cap. The disclaimer sets what you promise; the cap sets what a breach can cost.
- The most common review miss is a disclaimer buried in lowercase boilerplate, which fails the conspicuousness test and leaves the implied warranties alive.
What a warranty disclaimer actually does
A disclaimer resets the default risk allocation the law imposes. Three things are happening.
1. It strips implied warranties. Under sales law, goods come with an implied warranty of merchantability (they are fit for ordinary use) and, where the seller knows the buyer's purpose, fitness for a particular purpose. The disclaimer removes these so the buyer cannot sue for them.
2. It draws the line at the express warranty. After a disclaimer, the only promises that remain are the express warranties the seller chose to give (for example, "the Services will perform materially as documented for 90 days"). Everything outside that line is the buyer's risk.
3. It must be conspicuous to work. The law treats disclaimers as easy to abuse, so it requires them to be visible. A disclaimer hidden in lowercase mid-paragraph text can be held unenforceable, leaving the implied warranties in place exactly as if the clause were never written.
Why it matters: the dollars at stake
Consider a buyer that pays $500,000 for industrial equipment to run a specific production line. The equipment works in general but cannot handle that line's tolerances, and the buyer loses $400,000 in scrapped output.
This is an illustrative example. The outcome depends on the disclaimer.
- With no valid disclaimer, the implied warranty of fitness for a particular purpose applies (the seller knew the intended use), and the buyer has a claim for the loss.
- With a conspicuous "as-is" disclaimer that names merchantability and disclaims fitness, those implied warranties are gone, and the buyer is limited to any express warranty the seller actually gave.
Same equipment, same loss. A properly drafted, conspicuous disclaimer can be the difference between a $400,000 claim and none. And a disclaimer the seller thought it had, but which was not conspicuous, gives the buyer the claim anyway.
Who wants what
| Seller / supplier | Buyer / customer | |
|---|---|---|
| Implied warranties | Disclaim all, "as-is" | Keep merchantability and fitness |
| Express warranty | Narrow, short, single remedy | Broad, longer, with real remedies |
| Conspicuousness | Capitalized, but otherwise minimal | Wants the disclaimer clear (and, ideally, weak) |
| Statutory / consumer warranties | Disclaim to the maximum allowed | Preserve non-waivable protections |
| Service vs goods | "Services provided as-is" | A performance warranty with a cure |
| Remedy for breach | Repair or replace, sole remedy | Repair, replace, refund, or damages |
The pattern: the seller wants to give one narrow express warranty and disclaim the rest; the buyer wants the implied warranties preserved or a meaningful express warranty in their place.
Market-standard language
A typical disclaimer in a software or goods agreement reads close to this:
DISCLAIMER OF WARRANTIES.
EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTION [X], THE
SERVICES AND ANY DELIVERABLES ARE PROVIDED "AS IS" AND "AS AVAILABLE,"
AND VENDOR DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED,
STATUTORY, OR OTHERWISE, INCLUDING ALL IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND
NON-INFRINGEMENT. VENDOR DOES NOT WARRANT THAT THE SERVICES WILL BE
UNINTERRUPTED, ERROR-FREE, OR SECURE.
The capitalization is doing legal work, not just visual emphasis. To disclaim implied warranties in a sale of goods the disclaimer generally must be conspicuous, and disclaiming merchantability usually requires the word "merchantability" to appear. The "except for the express warranties in Section X" carve-back keeps the affirmative promises the seller actually wants to stand behind.
The negotiation: standard, fallback, walk-away
The disclaimer is half of a pair; negotiate it against the express warranty.
| Issue | Opening position (seller) | Fallback both sides accept | Walk-away (buyer) |
|---|---|---|---|
| Implied warranties | Disclaim all, including title and non-infringement | Disclaim merchantability and fitness; keep title and non-infringement | No disclaimer; statutory implied warranties apply |
| Express warranty | "Materially as documented," 30 days | Performance warranty, 90 days, with cure | A robust warranty with refund and damages |
| Remedy | Repair or replace, sole and exclusive | Repair, replace, or refund the fees for the period | Repair, replace, refund, plus damages up to the cap |
| "As-is" scope | Whole agreement provided as-is | As-is for beta or free components only | No as-is anywhere |
| Service availability | No uptime warranty | Uptime warranty in a separate SLA | Uptime warranty with credits |
The usual landing zone keeps a narrow set of implied warranties (title and non-infringement, which buyers care about most) and replaces merchantability and fitness with a defined express performance warranty plus a cure remedy.
Common carve-outs / variations
Disclaimers vary by what they keep and what they cannot reach:
- As-is / where-is sale. The strongest form, common in used-goods, asset, and beta deals. "As-is," "with all faults," or "where-is" signals no implied warranties at all beyond any expressly stated.
- Keep title and non-infringement. Buyers often accept disclaiming merchantability and fitness but insist on warranties of title (the seller owns it) and non-infringement (it does not violate third-party IP).
- Express-warranty carve-back. "Except for the express warranties in Section X" preserves the affirmative promises the seller wants to keep while disclaiming the rest.
- Buyer examination. Where the buyer inspects the goods (or a sample or model) before contracting, or refuses to inspect after the seller demands it, there is no implied warranty as to defects the examination ought to have revealed. Sellers of used or shown goods lean on this; buyers should limit any acknowledgment of inspection to what they actually examined.
- Statutory and consumer floors. Some implied warranties cannot be disclaimed in consumer transactions, and some statutory warranties survive any disclaimer. The clause usually adds "to the extent permitted by law."
- Exclusive remedy plus disclaimer. The disclaimer pairs with a "repair or replace" exclusive remedy; if that remedy fails of its essential purpose, the disclaimer or the damages cap can be at risk.
A buyer-protective fallback often reads:
Vendor disclaims the implied warranties of merchantability and fitness
for a particular purpose, but warrants that it has the right to provide
the Services and that the Services do not infringe any third-party
intellectual property right. The foregoing non-infringement warranty
is in addition to Vendor's indemnification obligations in Section [X].
Jurisdiction and enforceability notes
Warranty disclaimers are generally enforceable between businesses, but with real limits:
- Conspicuousness and magic words. Under the UCC section 2-316(2), to exclude the implied warranty of merchantability the language must mention merchantability and, if written, be conspicuous; to exclude fitness, a conspicuous writing is enough. Section 2-316(3)(a) adds that "as-is," "with all faults," or similar language that calls the buyer's attention to the exclusion also removes implied warranties in a goods sale.
- Examination and trade usage. Section 2-316(3)(b) removes implied warranties as to defects a buyer's examination ought to have revealed, where the buyer inspected the goods or refused to inspect. Section 2-316(3)(c) lets course of dealing, course of performance, or usage of trade exclude or modify an implied warranty even without express disclaimer language.
- Express warranties cannot be disclaimed away. A disclaimer that contradicts an express warranty the seller actually gave is generally read to preserve the express warranty. You cannot promise something and disclaim it in the same breath.
- Unconscionability. A disclaimer can be struck under UCC section 2-302 if it is both procedurally unconscionable (hidden in an adhesion contract) and substantively unconscionable (so one-sided it leaves the buyer no remedy). Conspicuousness alone does not save a disclaimer a court finds oppressive.
- Consumer protections. Many states restrict or bar disclaiming implied warranties in consumer transactions. Under the federal Magnuson-Moss Warranty Act (15 U.S.C. 2308), a seller that gives a written warranty or a service contract on a consumer product cannot disclaim implied warranties at all; it may only limit their duration to the written warranty's term, and only if that limit is conspicuous and not unconscionable. Business-to-business deals have more freedom.
- Failure of essential purpose. If the exclusive remedy fails (a repair-or-replace promise the seller cannot deliver), a court may revive remedies the contract tried to cut off, and the disclaimer's effect can be tested alongside the limitation of liability cap.
This is general information, not legal advice for a specific deal. Enforceability turns on the governing law, whether goods or services are involved, and the facts, so confirm against the controlling law before relying on a disclaimer.
Review checklist: red flags to catch
- The disclaimer is lowercase and buried, failing the conspicuousness requirement.
- It tries to disclaim merchantability without using the word "merchantability."
- The disclaimer contradicts an express warranty the seller gave elsewhere in the contract.
- No carve-back for title and non-infringement, which buyers usually need.
- An "as-is" label slapped on a paid, production deal where the buyer expected a performance warranty.
- A disclaimer paired with a "repair or replace" sole remedy with no fallback if that remedy fails.
- The disclaimer ignores non-waivable consumer or statutory warranties that apply to the transaction (Magnuson-Moss, state consumer-warranty acts).
- A broad acknowledgment that the buyer "inspected and accepts" the goods, which can hand the seller a section 2-316(3)(b) examination defense beyond what was actually reviewed.
- A disclaimer so one-sided it leaves the buyer no remedy at all, inviting an unconscionability challenge that can take the whole clause down.
How it interacts with other clauses
A disclaimer rarely stands alone; read it with:
- Representations and warranties: the disclaimer marks where the affirmative warranties stop.
- Limitation of liability: both must be conspicuous, and a failed exclusive remedy can put the cap at risk too.
- Indemnification: a non-infringement warranty often pairs with an IP indemnity.
- Service level agreement: the uptime warranty the disclaimer would otherwise sweep away usually lives in the SLA.
For the broader workflow, see the in-house contract review playbook and, for SaaS deals specifically, how to review a SaaS agreement.
FAQ
What is a warranty disclaimer? It is a clause that removes the implied warranties the law would otherwise read into a contract (merchantability and fitness for a particular purpose) and limits the buyer to the seller's express warranties. "As-is" is the strongest common form, signaling no warranties beyond any expressly stated.
Which implied warranties can you disclaim? In a business sale of goods you can generally disclaim merchantability and fitness for a particular purpose, and often title and non-infringement, if the language is conspicuous and uses the right words. Express warranties you actually gave, and many consumer and statutory warranties, cannot be disclaimed.
Why do warranty disclaimers have to be in all capitals? Because the law requires an implied-warranty disclaimer to be conspicuous, meaning a reasonable person would notice it. Capitalization or bold is the traditional way to meet that standard. A disclaimer buried in lowercase boilerplate can be held unenforceable, leaving the implied warranties in place.
What does "as-is" mean in a contract? "As-is" (or "with all faults") tells the buyer it takes the goods or services in their current condition with no implied warranties. In many goods sales it excludes implied warranties on its own, but buyers should still confirm whether title and non-infringement, or any express warranty, survive.
Can you disclaim a warranty you already made? No. A disclaimer that contradicts an express warranty the seller actually gave is generally read to preserve the express warranty. You cannot promise the product performs as documented and disclaim that promise in the same agreement.
What happens if the disclaimer is not conspicuous? It can be held unenforceable for the implied warranties it tried to remove, which leaves those warranties alive as if the clause were never written. That is why a non-conspicuous disclaimer is one of the most expensive drafting misses for a seller.
Does a warranty disclaimer apply to services? Yes, sellers commonly disclaim warranties for services too, often as "services provided as-is" alongside a narrow express performance warranty. The implied-warranty rules in the UCC are written for goods, but services contracts use the same disclaimer mechanics to limit what the provider promises.
Can you disclaim implied warranties in a consumer contract? Usually not fully. Under the federal Magnuson-Moss Warranty Act, a seller that gives a written warranty or a service contract on a consumer product cannot disclaim implied warranties; it may only limit their duration to the written warranty's term. Several states go further and make consumer implied warranties non-waivable. B2B deals have far more room to disclaim.
Does inspecting the goods waive the implied warranties? It can. Under UCC section 2-316(3)(b), if the buyer examines the goods (or a sample or model) before contracting, or refuses to examine after the seller demands it, there is no implied warranty as to defects the examination ought to have revealed. A signed acknowledgment that the buyer "inspected and accepts" the goods can broaden that defense, so buyers should tie any such statement to what they actually looked at.
What is the difference between a warranty disclaimer and a limitation of liability? The disclaimer controls what the seller promises: it strips implied warranties so there is nothing to breach. The limitation of liability controls what a breach can cost: it caps damages and carves out consequential losses if a promise that survives is broken. Sellers use both because a court can find a way around one but not always the other, and a failed exclusive remedy can put either at risk.
Can a warranty disclaimer be thrown out even if it is in all capitals? Yes. Conspicuousness is necessary but not sufficient. A disclaimer can still fall to an express warranty it contradicts, a non-waivable consumer or statutory warranty, fraud or concealment of a known defect, or an unconscionability finding under UCC section 2-302 when the clause is hidden in an adhesion contract and leaves the buyer no remedy.
Related clauses
Clauses that get negotiated alongside this one.
