Exclusion of warranties: Overview, definition, and example
What is exclusion of warranties?
Exclusion of warranties is a contract clause that limits or removes guarantees about the quality, performance, or suitability of a product or service. This means that the party providing the product or service is not responsible if it doesn’t meet the buyer’s expectations, unless a specific warranty is expressly stated in the contract.
For example, if a business sells software "as-is" without warranties, the buyer cannot later claim that it should have worked a certain way or included additional features.
Why is exclusion of warranties important?
This clause is important because it protects businesses from unexpected liability. Without it, a seller could be held responsible for problems the buyer assumed were covered, even if no promises were made.
For businesses buying goods or services, understanding this clause is crucial because it means they may not be able to demand refunds or repairs unless the contract explicitly includes warranties.
Understanding exclusion of warranties through an example
Imagine a small business purchases a used commercial vehicle from a dealership. The sales contract includes an exclusion of warranties clause stating that the vehicle is sold “as-is, with no guarantees of performance or condition.” A few weeks later, the vehicle breaks down. Because of the exclusion of warranties clause, the buyer cannot hold the dealership responsible for repairs or claim that the vehicle should have been in better condition.
In another scenario, a web development company sells a template website design to a client but includes an exclusion of warranties clause stating that they do not guarantee the website will be error-free or work perfectly on all browsers. If the client later complains about compatibility issues, the company is not liable because they explicitly excluded any guarantees.
An example of an exclusion of warranties clause
Here’s how this type of clause might appear in a contract:
“Except as expressly stated in this Agreement, the Provider disclaims all warranties, express or implied, including but not limited to warranties of merchantability, fitness for a particular purpose, and non-infringement. The Service is provided ‘as-is’ without any guarantees of performance or suitability.”
Conclusion
Exclusion of warranties protects businesses from unexpected liability by clarifying that no guarantees are being made unless explicitly stated. For buyers, it highlights the importance of reviewing contracts carefully to understand what protections they do or do not have. By including an exclusion of warranties clause, businesses can manage risk and set clear expectations for their products or services.
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.