Wednesday, January 4, 2012


There are a number of disclaimers that suppliers may want to include in their proposal or contract. A disclaimer is statement to the effect that something shall not apply. For example a common disclaimer that suppliers want to add is disclaiming any implied warranties for fitness for a particular purpose or the implied warranties of merchantability.

In consumer products the consumers get bombarded with disclaimers in advertisements. “Use only as directed” is a disclaimer of responsibility and liability if you used it otherwise. “Your results may vary” is a disclaimer that you will achieve the advertised results. “Past performance is not a guarantee of future performance” is a disclaimer that past stock or fund performance is not guaranteed for future investments. “Dispose of properly is a disclaimer of responsibility of the supplier for the way you dispose of it. “Do not purchase if seal is broken” is a disclaimer against liability for potentially tampered items.

In contracts suppliers want may want to use other disclaimers. For example, if a product has a limited shelf life they may want to include “use before date stamped” to avoid responsibility for problems that could occur because of deterioration. Break the seal software is a form of disclaimer, “breaking the seal constitutes acceptance of the license” is disclaiming the buyer’s right to negotiate the license if they broke the seal. “Reproduction of documents is prohibited” disclaims any right to reproduce them.“Price does not include taxes, shipping and handling” disclaims those items from being included in the price. “This specification is subject to change without notice” disclaims any buyer right to have approval over changes to the specification. “Supplier shall not be responsible for any indirect, incidental or consequential damages resulting from any defect” would disclaim the buyers right to claim those types of damages.

In many locations the laws require that for a disclaimer to be effective it must be conspicuous. This means that it must be written in a manner where the reasonable person to whom the disclaimer will operate against will notice the disclaimer. If you write a contract and want to include a disclaimer, the most common practice would be to write the disclaimer in all CAPITAL letters so there is no argument that the disclaimer was conspicuous. If you write agreements in location where the alphabet does not include capital letters, you would need to use a different convention to make it conspicuous. Anything that would draw a reasonable reader’s attention to that section should work.

I’ve seen suppliers try to include disclaimers at the very back of their product specifications written in a font that was much smaller than the rest of the specification. To me what they were trying to do is slide it through and not have it noticed. That’s not the smartest approach, as it may not be enforced. When I would run into those situations I could have simply not dealt with it and later argue that the disclaimer wasn’t effective because it failed to meet the requirement that it be conspicuous. That’s not my style and I wouldn’t want to take the chance that a court might enforce it. I would always negotiate it out or negotiate a disclaimer that I could live with. I would include that disclaimer in the agreement and make it clear that the disclaimer in the product specification did not apply.

If a disclaimer is important to you, don’t try to hide it. Make it clear and conspicuous. If you don’t your disclaimer may not be applied. In the end, which is worse? Having a disclaimer that you had to negotiate, or a disclaimer that may not be enforced?

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