Does this "AS IS" / warranty-disclaimer clause validly exclude South Dakota's implied warranties?
Yes, through either of two independent routes under SDCL 57A-2-316. Route one, subsection (2): "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." Route two, subsection (3)(a), works without mentioning merchantability at all: "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." James River Equipment Co. v. Beadle County Equipment, Inc. confirms route two is the only mechanism the UCC provides for an "as is" clause specifically: "The UCC contemplates that only implied warranties can be disclaimed by use of 'as is' clauses."
The trap
James River's own framing is also the limit: "as is" language under subsection (3)(a) can exclude only IMPLIED warranties, never an express warranty the seller separately made: a drafter who wants to disclaim implied warranties while an express warranty survives is using the right tool, but a drafter hoping "as is" also cancels a stray express representation is not. Subsection (3)(a) is itself qualified by "unless the circumstances indicate otherwise," so surrounding facts can defeat even squarely worded "as is" language. Subsection (3)(b) is a separate, fact-driven route that has nothing to do with how the clause is worded: when the buyer before contracting has examined the goods (or a sample) as fully as desired, or has refused an offered examination, there is no implied warranty as to defects the examination ought to have revealed. Remedies for a warranty that is NOT excluded are governed separately by SDCL 57A-2-718 and 57A-2-719, not by this section.
4 authorities
- statuteSDCL § 57A-2-316enactment 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.
- statuteSDCL § 57A-2-316enactment date not established
The words that state the rule
(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; 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.
- case646 N.W.2d 265James River Equipment Co. v. Beadle County Equipment, Inc.sd-sddecided 2002read it at the source ↗
The words that state the rule
The UCC contemplates that only implied warranties can be disclaimed by use of “as is” clauses.
- statuteSDCL § 57A-2-316enactment date not established
The words that state the rule
(4) Remedies for breach of warranty can be limited in accordance with the provisions of this chapter on liquidation or limitation of damages and on contractual modification of remedy (§§ 57A-2-718 and 57A-2-719 ).