Sales and Leases | 24
Excluding and Modifying Warranties
Within limits, Article 2 permits parties to exclude or modify warranties, including the implied warranties of merchantability and fitness for a particular purpose.
1. Excluding or Modifying Express Warranties To the extent reasonable, any words or conduct tending to create an express warranty must be construed consistently with any words or conduct tending to negate or limit a warranty ( e.g. , the goods are sold “as is”). But to the extent consistent construction is unreasonable, words or conduct tending to create an express warranty prevail over words or conduct that would negate or limit the warranty. This rule is subject, however, to the parol-evidence rule, which may exclude evidence of words or conduct tending to create an express warranty. 2. Excluding or Modifying the Implied Warranty of Merchantability There are two general ways to exclude or modify the implied warranty of merchantability. The first is conspicuous language, written or oral, that mentions merchantability. The second is by language like “as is,” “with all faults,” or a similar expression that brings home to the buyer, in common understanding, that warranties are excluded and makes clear that implied warranties are absent. This sort of language need not mention merchantability. However, it will not exclude any warranties if the circumstances indicate that it should not ( e.g. , the seller’s fraudulent representation), and many courts require this language to be conspicuous. 3. Excluding or Modifying the Implied Warranty of Fitness for a Particular Purpose There are two general ways to exclude or modify the implied warranty of fitness for a particular purpose. The first is by written, conspicuous warranty disclaimer, which need not mention fitness. The second is by language like “as is,” “with all faults,” or a similar expression that brings home to the buyer, in common understanding, that warranties are excluded and makes clear that implied warranties are absent. Here again, this language will exclude the warranties unless the circumstances indicate otherwise, and the language should generally be written and conspicuous. 4. Conspicuous Defined Conspicuous means that a term is written, presented, formatted, or displayed so that a reasonable person who is subject to the term should have noticed it. That is, the term should be contrasted so as to call the reader’s attention to it ( e.g. , written in all capital letters or highlighted).
Conflicting Warranties
Article 2 sets forth rules to reconcile cumulative or conflicting warranties in one contract.
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