MBE Rules · Contracts
Warranty Disclaimers
UCC §2-316
The rule
Merchantability may be disclaimed orally if the word merchantability is used, or by conspicuous writing; fitness requires a conspicuous writing; 'as is' language disclaims all implied warranties.
In plain English
Warranty disclaimers are statements that limit or eliminate the seller's responsibility for certain warranties. For a disclaimer of the implied warranty of merchantability, it can be made orally if the term 'merchantability' is used or through a conspicuous written statement, while disclaiming the implied warranty of fitness for a particular purpose requires a conspicuous written disclaimer. Using 'as is' language effectively disclaims all implied warranties.
Worked example
A seller tells a buyer that a used car is in good working condition and uses the term 'merchantability' during their conversation. Later, the buyer discovers the car has significant mechanical issues. Since the seller used the term 'merchantability' orally, the disclaimer is valid, and the seller is not liable for the car's condition.
Memory hook
Say 'merchantability' to disclaim it, but fitness needs to be written big!
The trap
Exams often present scenarios where students must determine if a disclaimer was effective, leading them to overlook the specific requirements for each type of warranty. Students might confuse the requirements for disclaiming merchantability with those for fitness.
How examiners test it
Questions typically involve a fact pattern where a seller attempts to disclaim warranties, requiring candidates to analyze the effectiveness of the disclaimers based on the specific language used and the method of communication.
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