No implied warranties: Overview, definition, and example
What are no implied warranties?
“No implied warranties” is a legal term used to clarify that no automatic guarantees or assurances are being made about the condition or performance of a product or service, beyond what is explicitly stated in a contract. In most contracts, especially those involving goods or services, there may be implied warranties under the law that suggest the product or service will meet certain basic standards (like being fit for its intended purpose). A “no implied warranties” clause removes or limits these automatic legal guarantees, meaning that only the explicit terms and conditions agreed upon in the contract are valid.
In simpler terms, "no implied warranties" means that the seller or service provider is not promising anything beyond what is specifically written in the contract.
Why are no implied warranties important?
No implied warranties are important because they help define the limits of liability in a contract. By including this clause, businesses can avoid being held responsible for certain issues that are not clearly outlined in the agreement. This is especially important for companies that sell products or provide services with specific limitations. The clause helps protect the seller from legal claims or complaints that may arise from issues that are not covered by the written contract, reducing potential legal risk.
For SMB owners, understanding the implications of a "no implied warranties" clause can help manage expectations with customers and clients, ensuring that only the agreed-upon terms are enforceable.
Understanding no implied warranties through an example
Imagine your business sells a piece of equipment to a customer. Your contract specifies that the equipment is sold "as is," with no implied warranties. This means that if the equipment malfunctions after the sale, the customer cannot claim that it should have been free from defects or fit for a particular purpose unless it was explicitly stated in the contract. The customer’s only recourse would be any remedies clearly outlined in the agreement (such as a return policy or repair service).
In this case, the “no implied warranties” clause protects your business from having to cover repairs or refunds for issues that are not specifically covered by the contract.
Example of a "no implied warranties" clause in a contract
Here’s an example of what a "no implied warranties" clause might look like in a contract:
“The Seller makes no representations or warranties other than those expressly stated in this Agreement. The Buyer acknowledges and agrees that no implied warranties, including but not limited to implied warranties of merchantability or fitness for a particular purpose, apply to the goods or services provided under this Agreement.”
Conclusion
A "no implied warranties" clause is an important tool for limiting a business's liability by ensuring that only the warranties explicitly stated in the contract are binding. For SMB owners, it’s essential to understand that this clause protects the business from future legal claims that might arise from conditions or performance expectations that were not clearly agreed upon in the contract. By using this clause, businesses can set clear terms and manage risks effectively when selling 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.