Will our “AS IS, NO WARRANTIES” clause work in Rhode Island?
Between businesses, usually yes, and it does not have to say “merchantability”; in a consumer sale it fails unless the writing also tells the buyer, before the sale, both that the goods are sold “as is” and that the entire risk of quality and performance is on the buyer; and on a dealer's sale of a used motor vehicle it fails unless the statutory windshield notice and a separately initialled bill-of-sale waiver are given. Article 2 of the Rhode Island UCC is not among the Rhode Island statutes we publish, so the statutory text below is quoted from the opinions that quote it rather than from the section itself. In Monex, Inc. v. Anthony A. Nunes, Inc. the Court set out § 6A-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 then decided the case under subsection (3)(a), “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”, holding that a supplier's bulletin saying it would no longer “specify” or “bond” a roofing system was “language commonly used in the trade to indicate that Bird would no longer warrant the system”, and affirming the judgments below. Star-Shadow Productions, Inc. v. Super 8 Sync Sound System put the same point generally: “Section 6A-2-316 does not mandate that a limitation of liability clause expressly mention the implied warranty of merchantability in order to effectively waive this implied warranty. Rather, a general statement that no warranties exist beyond those contained in the document is sufficient.” Consumer sales are governed by Rhode Island's non-uniform § 6A-2-329, which East Side Prescription Center, Inc. v. E.P. Fournier, Co. quotes: “No consumer sale on an ‘as is’ or ‘with all faults’ basis shall be effective to disclaim the implied warranty of merchantability, or where applicable, the implied warranty of fitness, unless a conspicuous writing clearly informs the buyer prior to the sale, in simple and concise language” both that the goods are sold on that basis and that “[t]he entire risk as to the quality and performance of the goods is with the buyer.” The same Court held that “the fact that a disclaimer is conspicuous and has been examined by the purchaser is not sufficient to constitute a disclaimer.” For a dealer's used car the General Laws add a form of their own: § 31-5.4-2(a) says “No dealer shall sell a used motor vehicle to a consumer without giving the consumer a written warranty”, and § 31-5.4-4 permits a waiver of that chapter only if the dealer posts a windshield notice “at least eight and one-half inches (8½″) by eleven inches (11″) in size, in bold print one inch in height” reading “NO WARRANTY AS TO CONDITION — SOLD AS IS”, and prints the waiver on the bill of sale “in a type size larger and of a different color than any other type”, “separately initialed by the purchaser and the dealer.” And under Ruzzo v. LaRose Enterprises a disclaimer can satisfy every UCC formality and still fail: “Although the disclaimer of warranties provision is in full compliance with the UCC provisions in terms of its conspicuousness and language, we conclude that in Rhode Island, a disclaimer for personal injuries arising from the use of a consumer product introduced into the stream of commerce is ‘unconscionable.’”
The trap
The conspicuous, merchantability-naming form that passes in most states is not enough in a Rhode Island consumer sale, and the governing section itself could not be located. Section 6A-2-329(2)(b) is a Rhode Island non-uniform provision that demands two specific pre-sale statements, and East Side Prescription Center adds that “[t]he meaning of the language must be clear to the buyer in addition to being conspicuous.” The disclaimer that failed there was in all capitals next to the signature and was struck down for ambiguity. The Court held “We find that this language is ambiguous” and that it did not constitute an effective disclaimer of the implied warranty of merchantability and reversed the judgment for the dealer on counts 1, 2 and 4, because it disclaimed warranties on all goods and services and then narrowed itself to used vehicles: “It is not clear whether Fournier intends to disclaim all warranties running to every automobile it sells or just to those used vehicles sold ‘as is’ that are not expressly warranted.” The used-car chapter carries exact boundaries a form cannot ignore: it reaches a “purchaser, other than for purposes of resale, of a used motor vehicle normally used for personal, family, or household purposes”, and by § 31-5.4-4(d) it does “not apply to used motor vehicles sold for less than one thousand five hundred dollars ($1,500)” or to registered classic cars. Failing the chapter's own notice duty is not just a warranty problem: § 31-5.4-6 requires clear and conspicuous written notice of the chapter's warranties “and of the implied warranty of merchantability” at the time of purchase, and says a failure to provide the director's forms is prima facie evidence of an unfair and deceptive trade practice.
20 authorities
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.’ “(3) 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.”
The words that state the rule
We believe that bulletin No. 27 satisfied subsection 3(a) of § 6A-2-316. The language that Bird used indicating that Bird would no longer “specify” or “bond” the two-ply system was language commonly used in the trade to indicate that Bird would no longer warrant the system.
- case730 A.2d 1081Star-Shadow Productions, Inc. v. Super 8 Sync Sound SystemR.I.decided 1999read it at the source ↗
The words that state the rule
Section 6A-2-316 does not mandate that a limitation of liability clause expressly mention the implied warranty of merchantability in order to effectively waive this implied warranty. Rather, a general statement that no warranties exist beyond those contained in the document is sufficient.
- case585 A.2d 1176East Side Prescription Center, Inc. v. E.P. Fournier, Co.R.I.decided 1991read it at the source ↗
The words that state the rule
We agree that to be effective, a disclaimer of warranty must be conspicuous; however, according to §§ 6A-2-316 and 6A-2-329, the fact that a disclaimer is conspicuous and has been examined by the purchaser is not sufficient to constitute a disclaimer.
- case585 A.2d 1176East Side Prescription Center, Inc. v. E.P. Fournier, Co.R.I.decided 1991read it at the source ↗
The words that state the rule
No consumer sale on an ‘as is’ or ‘with all faults’ basis shall be effective to disclaim the implied warranty of merchantability, or where applicable, the implied warranty of fitness, unless a conspicuous writing clearly informs the buyer prior to the sale, in simple and concise language each of the following: (1) The goods are being sold on an ‘as is’ or ‘with all faults’ basis; and (2) The entire risk as to the quality and performance of the goods is with the buyer.
- case585 A.2d 1176East Side Prescription Center, Inc. v. E.P. Fournier, Co.R.I.decided 1991read it at the source ↗
The words that state the rule
The meaning of the language must be clear to the buyer in addition to being conspicuous.
- case585 A.2d 1176East Side Prescription Center, Inc. v. E.P. Fournier, Co.R.I.decided 1991read it at the source ↗
The words that state the rule
It is not clear whether Fournier intends to disclaim all warranties running to every automobile it sells or just to those used vehicles sold “as is” that are not expressly warranted.
The words that state the rule
Although the disclaimer of warranties provision is in full compliance with the UCC provisions in terms of its conspicuousness and language, we conclude that in Rhode Island, a disclaimer for personal injuries arising from the use of a consumer product introduced into the stream of commerce is “unconscionable.”
- statuteR.I. Gen. Laws § 31-5.4-2enactment date not established
The words that state the rule
No dealer shall sell a used motor vehicle to a consumer without giving the consumer a written warranty which shall at minimum apply for the following terms:
- statuteR.I. Gen. Laws § 31-5.4-4enactment date not established
The words that state the rule
the dealer shall post a notice unobstructed and conspicuously on the windshield of the vehicle to be sold. The notice shall be at least eight and one-half inches (8½") by eleven inches (11") in size, in bold print one inch in height, and shall state, “NO WARRANTY AS TO CONDITION — SOLD AS IS”.
- statuteR.I. Gen. Laws § 31-5.4-4enactment date not established
The words that state the rule
any waiver or disclaimer of the rights set forth in this chapter shall be printed on the bill of sale in a type size larger and of a different color than any other type on the bill of sale. The waiver shall be separately initialed by the purchaser and the dealer.
- statuteR.I. Gen. Laws § 31-5.4-4enactment date not established
The words that state the rule
this chapter shall not apply to used motor vehicles sold for less than one thousand five hundred dollars ($1,500). Further, this chapter shall not apply to the sale of classic cars registered pursuant to this title.
- statuteR.I. Gen. Laws § 31-5.4-1enactment date not established
The words that state the rule
“Consumer” means the purchaser, other than for purposes of resale, of a used motor vehicle normally used for personal, family, or household purposes and subject to a warranty
- statuteR.I. Gen. Laws § 31-5.4-6enactment date not established
The words that state the rule
Clear and conspicuous notice of the warranties created by this chapter of the rights pertaining to them and of the implied warranty of merchantability shall be given to the consumer in writing at the time the consumer purchases a used motor vehicle from the dealer.
The words that state the rule
The appeals are therefore denied and dismissed, and the judgments entered in the Superior Court are hereby affirmed.
- case585 A.2d 1176East Side Prescription Center, Inc. v. E.P. Fournier, Co.R.I.decided 1991read it at the source ↗
The words that state the rule
We find that this language is ambiguous; therefore, it does *1181 not constitute an effective disclaimer of the implied warranty of merchantability.
- case585 A.2d 1176East Side Prescription Center, Inc. v. E.P. Fournier, Co.R.I.decided 1991read it at the source ↗
The words that state the rule
We are of the opinion that the trial justice did err, and therefore, we reverse the judgment of the Superior Court concerning counts 1, 2, and 4.
- statuteR.I. Gen. Laws § 31-5.4-6enactment date not established
The words that state the rule
A seller’s failure to provide the buyer with the documents and forms promulgated by the director of the department of revenue pursuant to this section shall constitute prima facie evidence of bad faith and unfair and deceptive trade practice under § 6-13.1-1. Violations of this section shall be actionable by the buyer under §§ 31-5.4-5 and 6-13.1-5.2.
- statuteR.I. Gen. Laws § 31-5.4-4enactment date not established
The words that state the rule
Nothing in this section shall in any way limit the rights or remedies which are otherwise available to a consumer under any other law.
- statuteR.I. Gen. Laws § 31-5.4-2enactment date not established
The words that state the rule
If the used motor vehicle has thirty-six thousand (36,000) miles or less, the warranty shall be at a minimum of sixty (60) days or three thousand (3,000) miles, whichever comes first.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.