Warranty Disclaimer

What it means

A warranty disclaimer states what the provider does not promise. It is the clause, often in capital letters, saying the product or service is provided "AS IS" and disclaiming implied warranties of merchantability and fitness for a particular purpose.

Those two implied warranties exist by default in many jurisdictions. Merchantability means goods are of a quality that would pass without objection in the trade. Fitness for a particular purpose means that where the seller knew what you needed something for, it should be suitable for that. Disclaiming them removes protections you would otherwise have automatically — which is why the clause is so often in capitals, since some laws require the disclaimer to be conspicuous to be effective.

What you are left with is whatever express warranties the contract does give, and those are frequently narrow: that the service will conform to its documentation, that it will be performed in a professional manner, or that the provider has the right to enter the agreement. Sometimes there is a limited warranty period after which even those expire.

Read the disclaimer together with the limitation of liability. Together they define what the provider is actually accountable for, and it is often less than the sales conversation implied. If the service is business-critical, this pairing is where you find out what happens when it fails.

For a SaaS agreement, check the disclaimer against the service level commitment, if any. A disclaimer of all warranties alongside an uptime guarantee with meaningful credits is a different proposition from one standing alone.

Why it matters for your business

This clause plus the liability cap is your entire remedy if a product does not do what you bought it for. Read together, they often add up to a refund of recent fees and nothing else.

Related terms

• Limitation of Liability — The cap is the number that tells you your worst case.
• Indemnification — This is the clause most likely to cost you more than the contract is worth.
• Scope of Work — Scope disputes are the most common source of unpaid work in small business contracts, and they rarely reach a courtroom — they end with somebody absorbing the cost to keep a client, which is usually the smaller party..