Contract Disclaimers and How to Use Them

Our business contract lawyers discussed warranties and disclaimers in the last blog post, but we’d to go into them more deeply here. These particular stipulations in contractual law can be sticking points within the agreement, and failure to uphold them can lead to a costly breach. Understanding these terms reflects how your company handles products from a given vendor and what information it passes on to consumers about them. See why they’re so important? Let’s have a more in-depth look.

Tempering Customer Expectations

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Health Products – particularly dietary supplements and other pharmaceutical grade items – can sound as though they’re the cure-all for what ails your customers. That is, until you slap the required “results not guaranteed” disclaimer on the label. Without this caveat, your business is making promises about a product that the manufacturer never intended the product to keep. When you entered into an agreement with the manufacturer to sell their product, a contract provision required you to place that disclaimer on the label.

If you don’t follow the rules, your business may be on the financial hook for the negative results your customers suffer. The bill from that decision alone could close your company’s doors forever.

A Disclaimer Isn’t a Shield against Legal Obligations

 Using a disclaimer to avoid legal responsibility won’t hold up in court and is usually sufficient to void all or a portion of the existing contract. For example, you can’t insert a disclaimer that declares an existing warranty in the contract unenforceable. In addition, a disclaimer cannot excuse your business from the obligation to provide certain basic standards of care, including a safe environment for customers to shop or use your facilities. Simply saying, “We’re not responsible for injuries” does not excuse your company from liability, if someone suffers injuries due to onsite negligence.

When the Buyer Bewares

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A disclaimer for purchasing a product in an “as is” condition may throw up red flags for a consumer. The same may be said for your company when buying raw materials from vendors or acquiring gently used equipment for use in your stores. In the modern world, “as is” disclaimers don’t work as they used to thanks to implied warranty regulations in states around the country. You, or anyone else, can’t knowingly sell a product that cannot perform the task it’s designed to do. The buyer must also have a reasonable amount of time to inspect the item before the sale is final. There’s no fast-talking deal closing, and trying to hustle someone through the buying or contract signing process may give good grounds to challenge the agreement later.       

Incorporating these provisions into business contracts may be a legal requirement, stem from a need to limit certain liabilities or inform consumers of the risks in using given products. Understanding when it’s appropriate usually requires the services of skilled business contract lawyers in your area. If you’re a business owner in Pennsylvania in need of contract assistance, contact our law firm today. We can go over the existing disclaimers in your agreement, decide which can stay and those that shouldn’t be on the page.