Disclaimer of warranty: Overview, definition, and example
What is a disclaimer of warranty?
A disclaimer of warranty is a contractual provision in which one party limits or eliminates express or implied warranties regarding the quality, performance, or suitability of a product, service, or other deliverable. By including this clause, the party providing the goods or services clarifies that they are not responsible for certain outcomes, defects, or conditions beyond the scope of what is explicitly promised in the agreement.
For example, a software provider might disclaim any implied warranty that the software is free from errors or will function without interruption.
Why is a disclaimer of warranty important?
A disclaimer of warranty is important because it protects businesses from liability for issues or risks that they cannot fully control or guarantee. For SMBs, it reduces the potential for disputes and legal claims by clearly defining the limitations of their obligations and responsibilities.
This clause also ensures transparency, so customers or clients understand the extent of the warranties provided and are not relying on unwarranted assumptions about the product or service.
Understanding a disclaimer of warranty through an example
Imagine an SMB sells custom furniture online. Their disclaimer of warranty states that while they guarantee the craftsmanship of the furniture, they do not warrant against natural variations in wood grain or damage caused by improper use or care. This protects the business from liability for factors outside their control.
In another scenario, a SaaS company provides cloud-based software and includes a disclaimer of warranty stating that the software is provided “as-is” and makes no guarantees about uninterrupted service or compatibility with all devices. This limits the company’s liability for factors such as internet outages or user-specific technical issues.
An example of a disclaimer of warranty clause
Here’s how a disclaimer of warranty clause might appear in a contract:
“The Goods and Services provided under this Agreement are supplied ‘as-is’ and without warranties of any kind, either express or implied, including but not limited to, implied warranties of merchantability, fitness for a particular purpose, or non-infringement. The Provider does not warrant that the Goods or Services will be error-free, uninterrupted, or free from defects.”
Conclusion
A disclaimer of warranty protects businesses by limiting liability for risks and issues outside their control while ensuring customers understand the scope of any guarantees. For SMBs, this clause is a vital tool to manage expectations, reduce legal exposure, and provide clarity about the terms of their offerings. Including a well-drafted disclaimer of warranty in agreements helps safeguard both the provider and the recipient, fostering a clear and balanced relationship.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.