Merchantability can sometimes be excluded or modified
The implied warranty of merchantability is not necessarily unavoidable in every sale. UCC-style rules allow sellers to exclude or modify implied warranties when specified requirements are met.
A review should ask:
- What exact words were used?
- Did the language mention merchantability?
- Was the disclaimer written or oral?
- Was written language conspicuous?
- Was it presented before the sale?
- Does state law restrict the disclaimer?
- Was a written warranty or service contract also supplied?
The disclaimer generally must mention merchantability
Under UCC § 2-316, language excluding or modifying the implied warranty of merchantability generally must mention merchantability.
Examples of wording that may require closer review include:
- The seller disclaims the implied warranty of merchantability.
- No warranty of merchantability applies to these goods.
- The implied warranty of merchantability is limited as stated below.
Broad wording such as no warranties or seller makes no promises may not satisfy every applicable requirement. The complete language and governing law matter.
What does conspicuous mean?
A written merchantability disclaimer generally must be conspicuous under the UCC framework.
Conspicuous wording is presented so that a reasonable person against whom it operates ought to notice it.
Features that may affect conspicuousness include:
- Heading size
- Capital letters
- Contrasting type or background
- Bold text
- Placement near the buyer's signature
- Separation from surrounding terms
- Whether the term was hidden behind additional links
Formatting alone does not guarantee enforceability. Timing, wording, state law, and the complete transaction remain important.
Can the disclaimer be oral?
UCC § 2-316 distinguishes between merchantability disclaimers generally and written disclaimers specifically.
The section states that language excluding merchantability must mention merchantability and, when it is in writing, must be conspicuous.
Oral disclaimers may create significant evidence and consumer-law questions. A seller should not assume that an informal spoken statement overrides written warranties, sales representations, or state consumer protections.
Buyers should preserve:
- Names of people involved
- Date and location of the statement
- Emails or messages confirming the discussion
- The final written agreement
- Advertising and product descriptions
When must the disclaimer be presented?
A disclaimer is generally more likely to affect the bargain when it is disclosed before or during the sale rather than delivered only after the transaction is complete.
Review whether the language appeared in:
- The signed sales agreement
- The checkout page
- The product listing
- A Buyers Guide
- An order confirmation available before payment
- A document delivered only after purchase
A term appearing for the first time inside product packaging or in a later email may raise different contract-formation questions.
As-is and with-all-faults language
UCC-style rules may permit phrases such as as is or with all faults to exclude implied warranties when the circumstances make clear that the buyer is taking the goods without those implied protections.
Important questions include:
- Was the language clearly displayed?
- Was it disclosed before purchase?
- Does state law permit the disclaimer?
- Was a written warranty also provided?
- Was a service contract sold?
- Did the seller make inconsistent express promises?
As-is language should not be assumed to erase every possible express warranty, fraud, title, disclosure, safety, or statutory obligation.
Buyer inspection can affect implied warranties
UCC § 2-316 also addresses situations in which the buyer examines the goods, sample, or model before contracting.
An implied warranty may be excluded for defects that an examination ought to have revealed when:
- The buyer examined the goods as fully as desired, or
- The buyer refused a demanded examination.
This does not necessarily exclude protection for concealed defects that a reasonable examination would not reveal.
Preserve inspection reports, photographs, test-drive records, communications, and evidence showing whether the defect was visible or concealed.
Course of dealing and trade usage
Implied warranties may also be excluded or modified through course of dealing, course of performance, or usage of trade in appropriate circumstances.
Commercial transactions may therefore require review of:
- Prior transactions between the parties
- Established contract practices
- Industry customs
- Trade definitions
- Repeated acceptance procedures
These issues are especially relevant in business-to-business contracts and may require evidence from people familiar with the relevant trade.
Written warranties may restrict disclaimers
Federal warranty law generally prohibits a supplier from disclaiming implied warranties on a consumer product when the supplier provides a written warranty for that product.
The seller or supplier may sometimes limit the duration of implied warranties to the duration of a written warranty when federal and state requirements are satisfied.
Review:
- Who issued the written warranty
- Whether the product is a consumer product
- Whether the supplier is attempting to disclaim or limit duration
- Whether the limitation is clear and prominent
- Whether state law permits the limitation
Service contracts may also restrict disclaimers
Federal law can restrict a supplier's ability to disclaim implied warranties when it enters into a service contract covering the consumer product.
Relevant facts may include:
- Who sold or entered into the service contract
- When the contract was entered into
- Which product systems or components it covers
- Whether the seller also used as-is language
- Whether another company merely administered the contract
The service contract and sales agreement should be preserved together.
State law may prohibit or restrict disclaimers
States can impose protections beyond the general UCC framework.
State law may:
- Restrict as-is consumer sales
- Require specific notices
- Protect particular product categories
- Regulate used-vehicle sales
- Limit duration restrictions
- Treat certain disclaimer wording as unconscionable
A disclaimer valid in one state may not have the same effect in another.
Consumer sales vs commercial sales
Commercial buyers and sellers often negotiate detailed warranty exclusions, remedy limits, inspection procedures, and acceptance standards.
Consumer transactions may receive additional protection through:
- Magnuson-Moss warranty rules
- State consumer-protection laws
- Used-product statutes
- Unconscionability rules
- Required disclosure laws
The parties' sophistication, bargaining process, and contract form can affect the analysis.
Disclaimer vs limitation of duration
A disclaimer attempts to eliminate an implied warranty. A duration limitation recognizes the warranty but attempts to shorten how long it applies.
| Term | General effect |
|---|---|
| Disclaimer | Attempts to prevent the implied warranty from applying |
| Duration limitation | Attempts to limit how long the implied warranty continues |
| Remedy limitation | Limits what relief is available after a breach |
| Damage exclusion | Attempts to exclude specified categories of loss |
These provisions raise different legal questions and should not be treated as interchangeable.
Disclaimer vs limitation of remedy
A seller may acknowledge that a warranty exists while limiting the available remedy to repair, replacement, refund, or another stated option.
A remedy limitation may address:
- Who performs repairs
- Whether replacement is permitted
- Whether refunds are available
- Incidental or consequential damages
- Shipping, removal, and installation costs
UCC § 2-719 separately addresses contractual modification and limitation of remedies.
How to evaluate a merchantability disclaimer
- Locate every sales and warranty document.
- Identify the legal seller and supplier.
- Find the exact disclaimer language.
- Check whether merchantability is mentioned.
- Review font, headings, placement, and prominence.
- Determine when the language was disclosed.
- Check for as-is or with-all-faults wording.
- Review any written warranty or service contract.
- Research state-specific restrictions.
- Separate disclaimer, duration, and remedy terms.
Merchantability disclaimers: key takeaway
Merchantability can sometimes be disclaimed, but the result depends on more than the presence of general no-warranty wording.
Review whether merchantability was mentioned, whether written language was conspicuous, when it was presented, whether as-is language was used, and whether federal or state law restricts the exclusion.
Review a product problem
Use the Merchantability Product-Fitness Checker
Review the seller, ordinary purpose, product failure, timing, disclaimer language, written warranty, service contract, evidence, and notice.
Frequently asked questions
Must a disclaimer use the word merchantability?
Under the UCC framework, language excluding or modifying merchantability generally must mention merchantability.
What makes a written disclaimer conspicuous?
Conspicuous language is presented so a reasonable person ought to notice it. Headings, font, contrast, placement, and surrounding text may matter.
Can as-is language disclaim merchantability?
It may in some transactions, but state law, disclosure timing, written warranties, service contracts, and other promises can affect the result.
Can a seller disclaim merchantability while giving a written warranty?
Federal law generally restricts a supplier from disclaiming implied warranties on a consumer product when it provides a written warranty.
Is limiting a remedy the same as disclaiming a warranty?
No. A remedy limitation may recognize the warranty but restrict the relief available after a breach.
Primary references
- UCC Section 2-314: Implied Warranty of Merchantability
- UCC Section 2-316: Exclusion or Modification of Warranties
- UCC Section 2-725: Statute of Limitations in Contracts for Sale
- FTC Businessperson's Guide to Federal Warranty Law
- FTC Consumer Advice: Warranties
- FTC Dealer's Guide to the Used Car Rule