Also known as: UCC 2-316 · U.C.C. § 2-316 · UCC § 2-316 · exclusion of warranties
Written by attorneys — see sources below.
A statutory rule permitting sellers to exclude all implied warranties in sales of goods by using expressions such as as is or with all faults. The language must call the buyer's attention to the exclusion and make plain that no implied warranty exists unless the circumstances indicate otherwise.
Apex Manufacturing sold a used industrial press to Lopez Machining through a purchase order stamped WITH ALL FAULTS in large bold type. Lopez later discovered the press malfunctioned repeatedly. The as is language excluded the implied warranties of merchantability and fitness so Lopez could not recover on those claims.
Pine Lines sold five used trailers to Continental Cargo under a purchase agreement containing the bold capitalized phrase TRAILERS SOLD WITH ALL FAULTS above the signature line. An earlier spec sheet had described the trailers as ideal for long-haul use. The final written disclaimer excluded the implied warranty of merchantability despite the prior description.
In May 1955, Claus H. Henningsen purchased a new 1955 Plymouth Plaza Club Sedan from Bloomfield Motors, Inc., an authorized De Soto and Plymouth dealer for Chrysler Corporation. Mr. Henningsen intended the car as a Mother's Day gift for his wife, Helen Henningsen, and communicated that intention to the dealer. He alone signed a one-page printed purchase-order form. The reverse side contained, in fine six-point script type, a warranty clause limiting the manufacturer's obligation to replacement of defective parts within ninety days or four thousand miles and disclaiming all other warranties, express or implied. The front of the form contained two even smaller paragraphs directing attention to the back-side conditions. The form was a standardized document prepared by the manufacturer and used by all its dealers. No one called the fine-print provisions to Mr. Henningsen's attention, and he did not read them. The car was delivered on May 9, 1955, after the dealer performed the items listed in Chrysler's New Car Preparation Service Guide. On May 19, 1955, while Mrs. Henningsen was driving north on Route 36 in Highlands, New Jersey, at twenty to twenty-two miles per hour on a smooth, paved highway, she heard a loud noise from the front of the car. The steering wheel spun in her hands and the vehicle veered sharply into a highway sign and brick wall. The car had been driven only 468 miles, had required no servicing, and had exhibited no unusual behavior before the accident. An insurance appraiser with eleven years of experience examined the wrecked vehicle and concluded that something in the steering mechanism from the wheel down to the front wheels had broken or dropped off. Plaintiffs also presented expert testimony that the steering failure resulted from a latent manufacturing defect that could not have been discovered by reasonable inspection. The negligence counts against both defendants were dismissed at trial. The case was submitted to the jury solely on the implied-warranty claims. The jury returned verdicts for both plaintiffs against Chrysler Corporation and Bloomfield Motors, Inc. Defendants appealed and plaintiffs cross-appealed from the dismissal of the negligence claim. The Supreme Court of New Jersey certified the matter directly before consideration by the Appellate Division.
View casePixel Refurbs sold refurbished laptops to BrightLine Studio through an online checkout that required acceptance of bold all-caps terms stating LAPTOPS SOLD AS IS WITH ALL FAULTS WITHOUT ANY WARRANTIES. Several laptops overheated and crashed after delivery. The as is clause excluded the implied warranty of merchantability even though the product page had described the laptops as perfect for professional use.
ProCD, Inc. compiled information from more than 3,000 telephone directories into a computer database. The database cost more than $10 million to compile and is expensive to keep current. ProCD sells a version of the database called SelectPhone on CD-ROM discs. The company sold the database to the general public for personal use at a low price of approximately $150 for the set of five discs while selling information to the trade for a higher price. Every box containing its consumer product declares that the software comes with restrictions stated in an enclosed license. This license is encoded on the CD-ROM disks as well as printed in the manual and appears on a user's screen every time the software runs. The license limits use of the application program and listings to noncommercial purposes. Matthew Zeidenberg bought a consumer package of SelectPhone in 1994 from a retail outlet in Madison, Wisconsin. He formed Silken Mountain Web Services, Inc. to resell the information in the SelectPhone database. Zeidenberg purchased two additional SelectPhone packages, each with an updated version of the database. He made the latest information available over the World Wide Web for a price through his corporation. ProCD filed this suit seeking an injunction against further dissemination that exceeds the rights specified in the licenses. The district court held the licenses ineffectual because their terms do not appear on the outside of the packages. The court added that the second and third licenses stand no different from the first because they might have been different.
View caseYes. Expressions such as as is or with all faults exclude all implied warranties when they call the buyer's attention to the exclusion and make plain that no implied warranty exists. The language need not mention merchantability by name.
The clause prevents exclusion when pre-contract communications or other facts show the parties did not intend a total disclaimer. An affirmative description of the goods as production capable or job-site ready can supply such circumstances.
No separate conspicuousness requirement applies when the seller uses the statutory as is formulation. The phrase itself is recognized as calling the buyer's attention to the exclusion in common understanding.
Buyer examination or refusal to examine eliminates implied warranties only for defects the examination ought to have revealed. An as is clause operates independently to exclude all implied warranties unless circumstances indicate otherwise.