Will our "AS IS, NO WARRANTIES" clause work in Maine?
Between businesses, yes if it is in the statutory form; in a sale of consumer goods or services, no, and it is also a statutory unfair trade practice. Under 11 M.R.S. § 2-316(2), "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", and § 2-316(1) requires warranty-creating and warranty-negating words to be read "wherever reasonable as consistent with each other". An "AS IS" clause takes a different route: subsection (3) opens "[n]otwithstanding subsection (2)" and provides that "[u]nless 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 also excludes warranties as to defects a buyer's own examination ought to have revealed, or by course of dealing, course of performance or usage of trade. "Conspicuous" is defined by 11 M.R.S. § 1-1201(10), "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 the same subsection says "[w]hether a term is 'conspicuous' or not is a decision for the court." Maine's non-uniform § 2-316(5) then removes the consumer field entirely: "[t]he provisions of subsections (2), (3) and (4) do not apply to sales of consumer goods or services. Any language, oral or written, used by a seller or manufacturer of consumer goods and services that attempts to exclude or modify any implied warranties of merchantability and fitness for a particular purpose or to exclude or modify the consumer's remedies for breach of those warranties is unenforceable." And § 2-316(5)(a): such a violation "constitutes a violation of Title 5, chapter 10, Unfair Trade Practices Act".
The trap
Maine is the outlier here and a disclaimer copied from a neighbouring state's form will fail. The first thing to notice is that subsection (5) disapplies subsections (2), (3) AND (4) for consumer sales, so in a consumer sale the "as is" route of subsection (3) is gone too, not just the mention-merchantability route. In State ex rel. Tierney v. Ford Motor Co. the Law Court noted "that Maine is the only jurisdiction to adopt a Uniform Commercial Code provision which provides that 'violations' of the Code constitute per se violations of the Unfair Trade Practices Act", and confined the per se rule to its subsection: "[s]ubsection (5) speaks only to the attempt of a seller or manufacturer of consumer goods 'to exclude or modify any implied warranties or [sic] merchantability and fitness for a particular purpose or to exclude or modify the consumer's remedies for breach of those warranties'." So the exposure is the attempt, not the defect. Two boundaries: the section defines consumer goods and services by the buyer's purpose ("used or bought primarily for personal, family or household purposes"), and it carves out one seller, since "[a] seller or manufacturer of a motor vehicle may indicate that, to the extent permitted by law, the seller or manufacturer is excluding or modifying implied warranties". Between businesses the ordinary rules still apply, and conspicuousness is for the court, not the jury: in Arundel Valley, LLC v. Branch River Plastics, Inc. the Law Court vacated the jury's verdict on both implied-warranty counts and remanded for the COURT to rule whether any legally operative disclaimer had been made, directing that if it had, "it must enter a judgment in Branch River's favor on the two implied warranty counts". A seller that wins the disclaimer point wins the counts outright. Note too that subsection (4) routes any attempt to limit remedies for breach of warranty through §§ 2-718 and 2-719, so a disclaimer and a remedy limitation are tested under different sections.
13 authorities
- statute11 M.R.S. § 2-316enactment 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
- statute11 M.R.S. § 2-316enactment date not established
The words that state the rule
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.
- statute11 M.R.S. § 2-316enactment 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 he 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 him; and (c). An implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade.
- statute11 M.R.S. § 2-316enactment 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 2‑718 and 2‑719 ).
- statute11 M.R.S. § 1-1201enactment 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.
- statute11 M.R.S. § 2-316enactment date not established
The words that state the rule
The provisions of subsections (2) , (3) and (4) do not apply to sales of consumer goods or services. Any language, oral or written, used by a seller or manufacturer of consumer goods and services that attempts to exclude or modify any implied warranties of merchantability and fitness for a particular purpose or to exclude or modify the consumer's remedies for breach of those warranties is unenforceable.
- statute11 M.R.S. § 2-316enactment date not established
The words that state the rule
A violation of section 2‑314 , 2‑315 or 2‑316 arising from the retail sale of consumer goods and services constitutes a violation of Title 5, chapter 10 , Unfair Trade Practices Act.
- statute11 M.R.S. § 2-316enactment date not established
The words that state the rule
Consumer goods and services are those new or used goods and services, including mobile homes, that are used or bought primarily for personal, family or household purposes.
- statute11 M.R.S. § 2-316enactment date not established
The words that state the rule
A seller or manufacturer of a motor vehicle may indicate that, to the extent permitted by law, the seller or manufacturer is excluding or modifying implied warranties.
The words that state the rule
We note at the outset that Maine is the only jurisdiction to adopt a Uniform Commercial Code provision which provides that “violations” of the Code constitute per se violations of the Unfair Trade Practices Act.
The words that state the rule
Subsection (5) speaks only to the attempt of a seller or manufacturer of consumer goods “to exclude or modify any implied warranties or [sic] merchantability and fitness for a particular purpose or to exclude or modify the consumer’s remedies for breach of those warranties
- case2016 ME 175Arundel Valley, LLC v. Branch River Plastics, Inc.Me.decided 2016read it at the source ↗
The words that state the rule
If Branch River effectively disclaimed all implied warranties, either through a “standard” warranty with disclaimers that was part of the parties’ initial contract, or through the “express” warranty identified as Exhibit 21, it could not, as a matter of law, be held liable on the two claims at issue at trial: breach of the implied warranty of merchantability and breach of the implied warranty of fitness for a particular purpose.
- case2016 ME 175Arundel Valley, LLC v. Branch River Plastics, Inc.me-medecided 2016read it at the source ↗
The words that state the rule
If the court rules, based on the evidence presented at trial, that Branch River made no legally operative disclaimer of implied warranties, the court must re-enter the judgment on the jury’s verdict in Arundel Valley’s favor. If, on the other hand, the court rules that Branch River did disclaim the implied warranties of merchantability and fitness for a particular purpose— by way of an express warranty or otherwise—it must enter a judgment in Branch River’s favor on the two implied warranty counts. 12 The entry is: Judgment vacated as to Count XI (breach of implied warranty of merchantability) and Count XII (breach of implied warranty of fitness for a particular purpose). Remanded for further proceedings consistent with this opinion.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.