Warranties cont. — disclaimers, Magnuson-Moss

Article 2 writes warranties in by default; this class is about whether and how a seller can write them back out. The answer turns on three layers: the UCC’s formal disclaimer rules, the unconscionability backstop, and a federal floor for consumer products. The lesson for the drafter is concrete — a disclaimer that no one notices is a disclaimer that does not work.

Disclaiming and limiting warranties

UCC § 2-316. Exclusion or modification of warranties. To exclude the implied warranty of merchantability, the language must mention “merchantability” and, if written, be conspicuous; to exclude fitness, the disclaimer must be in a conspicuous writing. Under § 2-316(3)(a), “as is” or “with all faults” language excludes all implied warranties — provided it is, in common understanding, an effective call to attention. Conspicuous (UCC § 1-201(b)(10)) means something a reasonable person ought to notice: contrasting type, larger font, color, or a clear heading. Capitalization alone, in otherwise uniform text, is not enough.

UCC § 2-302. Unconscionability. Even a formally valid disclaimer or remedy limitation may be struck if it is procedurally unconscionable (no meaningful choice, standard-form imposition) or substantively unconscionable (one-sided), especially where the seller knew of a latent defect. This is the equitable backstop behind the magic words.

UCC § 2-719. Limited remedies. Parties may limit remedies (e.g., repair-or-replace), but where a limited remedy “fail[s] of its essential purpose” — as when repeated repairs never cure the defect — the buyer may pursue the Code’s full remedies.

Magnuson-Moss Warranty Act, 15 U.S.C. § 2308. For consumer products, a seller who gives a written warranty (or sells a service contract) may not disclaim or modify the implied warranties. Federal law thus preempts the state-law “as is” route in exactly the consumer setting where it would bite hardest.

Cases

Carlson v. General Motors Corp. holds that a durational limitation on the implied warranty of merchantability may be unconscionable under § 2-302 when applied to consumer goods with inherent defects the seller knew about; the question is factual and unfit for summary disposition. Disclaimers do not automatically win.

Ardagh Metal Packaging v. American Craft Brewery (the deck supplies the citation) applies § 2-316’s conspicuousness requirement: an all-caps disclaimer in the same font as surrounding text, buried on the second page with no heading, was not conspicuous, so the buyer’s warranty claims survived. The drafting lesson is the print-and-show-a-stranger test.

What you should be able to do

Apply § 2-316 to decide whether a disclaimer is operative — checking magic words, conspicuousness, and the “as is” route. Use § 2-302 unconscionability as the backstop when the formal requirements are met but the clause is oppressive. Apply § 2-719’s “fails of its essential purpose” test to a remedy limitation. Identify when Magnuson-Moss bars a consumer-product disclaimer outright. This closes Module V (Interpretation); the next module asks when the duty to perform actually arises — conditions.