Is our 'AS IS, no warranties' language good in Iowa?
Yes, on the section’s own terms. Under Iowa Code § 554.2316(2), itself "Subject to subsection 3", excluding or modifying the implied warranty of merchantability requires language that mentions merchantability and, in a writing, must be conspicuous; excluding or modifying an implied warranty of fitness must be by a writing and conspicuous, and language excluding all implied warranties of fitness is sufficient if it states, for example, that "There are no warranties which extend beyond the description on the face hereof." Notwithstanding subsection 2, unless the circumstances indicate otherwise all implied warranties are excluded by expressions like "as is", "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty (§ 554.2316(3)(a)); there is also no implied warranty as to defects an examination ought in the circumstances to have revealed where the buyer examined the goods or a sample as fully as desired or refused to examine them, and an implied warranty can be excluded or modified by course of dealing, course of performance or usage of trade.
The trap
The "as is" route in subsection 3(a) does not require the word merchantability and does not require conspicuousness, and the reason is the two words subsection 3 opens with: "Notwithstanding subsection 2", which is what lets paragraph (a) out of subsection 2's mention-merchantability and conspicuousness requirements, but it is conditioned on "unless the circumstances indicate otherwise" and on language that in common understanding makes the exclusion plain, so it is not a magic phrase. A disclaimer also has to survive subsection 1: words tending to negate or limit warranty are construed wherever reasonable as consistent with words creating an express warranty and, subject to the parol-evidence section (§ 554.2202), the negation is inoperative to the extent that construction is unreasonable, so a disclaimer that contradicts an express warranty in the same document does not simply win. And § 554.2316(4) sends any limit on remedies for breach of warranty to §§ 554.2718 and 554.2719, which is a separate test from the disclaimer's form. One word in subsection 2 is defined elsewhere in the same chapter, and the definition is a standard rather than a formatting rule: a term is conspicuous when it is "so written, displayed, or presented that, based on the totality of the circumstances, a reasonable person against which it is to operate ought to have noticed it", and whether a term is conspicuous or not is a decision for the court (§ 554.1201(2)(j)).
5 authorities
- statuteIowa Code § 554.2316enactment date not established
The words that state the rule
Subject to subsection 3, to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that “There are no warranties which extend beyond the description on the face hereof.”
- statuteIowa Code § 554.2316enactment date not established
The words that state the rule
Notwithstanding subsection 2 a. unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like “as is”, “with all faults” or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty; and b. when the buyer before entering into the contract has examined the goods or the sample or model as fully as the buyer desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to the buyer; and c. an implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade.
- statuteIowa Code § 554.2316enactment date not established
The words that state the rule
Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this Article on parol or extrinsic evidence (section 554.2202) negation or limitation is inoperative to the extent that such construction is unreasonable.
- statuteIowa Code § 554.2316enactment date not established
The words that state the rule
Remedies for breach of warranty can be limited in accordance with the provisions of this Article on liquidation or limitation of damages and on contractual modification of remedy (sections 554.2718 and 554.2719).
- statuteIowa Code § 554.1201enactment date not established
The words that state the rule
“Conspicuous”, with reference to a term, means so written, displayed, or presented that, based on the totality of the circumstances, a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.