Will a printed 'as is / no warranties' clause disclaim implied warranties in Washington?
Not against a consumer, unless it was bargained for. Berg v. Stromme held that a dealer selling a brand new automobile "impliedly warrants that the automobile is of merchantable quality and that the new car is fit to transport the driver and his passengers with reasonable safety, efficiency and comfort", and that "Waivers of such warranties, being disfavored in law, are ineffectual unless explicitly negotiated between buyer and seller and set forth with particularity showing the particular qualities and characteristics of fitness which are being waived". The buyer won: the Court reversed and remanded "to try the issue of damages", measured by "the difference between the price paid and its fair market value in its delivered condition". The Supreme Court has since described Berg's rule as requiring warranty disclaimers to be both explicitly negotiated and set forth with particularity, with the burden on the party seeking to rely on the disclaimer, and has confirmed that two-prong test for consumer transactions and for commercial sales of goods where there is sufficient evidence of unfair surprise (Puget Sound Financial).
The trap
Berg is the Washington rule a UCC-trained drafter does not expect, and it is not a Code case: Berg holds the trial court was wrong to place the sale within "that provision of the Uniform Sales Act (RCW 63.04.160) which states that there is no warranty of fitness in the sale of a specified article under its patent or other trade name", a provision that is not in the law we hold. The Supreme Court has confirmed the two-prong test in the decades since: in American Nursery (1990), as Puget Sound Financial recounts it, and in Puget Sound Financial itself (2002). Conspicuous 'AS IS' or 'merchantability' language is not enough against a consumer: in Berg the buyer of a new car, whose purchase order listed nearly 40 items of equipment handwritten in ink, was not bound by the printed disclaimers in the purchase order and conditional sale contract. Outside that setting the test is looser: for clauses excluding or limiting liability for consequential damages "in commercial transactions for services where there is insufficient evidence of unfair surprise", Puget Sound Financial, recounting American Nursery, confirmed "the Schroeder totality of the circumstances analysis" instead, and on that analysis it upheld the clause, holding that "the totality of the circumstances support the conscionability and enforceability of the liability limitation clause" and capping recovery at "the amount of the fee charged for its service". One more thing before leaning on Berg's exact words: three of the eight justices in the opinions we hold did not sign them. Neill, J., concurring in the result and joined by Stafford and McGovern, JJ., called the conclusion that waivers are ineffectual unless "explicitly negotiated between buyer and seller and set forth with particularity" "too restrictive", and would have required only proof that the purchaser "was specifically made aware that he was waiving warranties". That is a concurrence, not the holding.
8 authorities
The words that state the rule
We are, therefore, of the opinion that, in the sale by a dealer or retailer of a brand new automobile, the dealer impliedly warrants that the automobile is of merchantable quality and that the new car is fit to transport the driver and his passengers with reasonable safety, efficiency and comfort according to the size, model and power of the vehicle. Waivers of such warranties, being disfavored in law, are ineffectual unless explicitly negotiated between buyer and seller and set forth with particularity showing the particular qualities and characteristics of fitness which are being waived.
- case146 Wash. 2d 428Puget Sound Financial, L.L.C. v. Unisearch, Inc.Wash.decided 2002read it at the source ↗
The words that state the rule
According to the decision in Berg , warranty disclaimers in a contract must be both (1) explicitly negotiated and (2) set forth with particularity. Id. at 196 . The presumption leans against the warranty disclaimer, and the burden lies on the party seeking to include the disclaimer to prove its legality.
- case146 Wash. 2d 428Puget Sound Financial, L.L.C. v. Unisearch, Inc.Wash.decided 2002read it at the source ↗
The words that state the rule
In American Nursery this court made another modification and extension of the Berg/Schroeder analysis. In that case we confirmed the use of the two-prong Berg analysis for consumer transactions involving warranty disclaimers and in commercial transactions for the sale of goods where there is sufficient evidence of unfair surprise. 115 Wn.2d at 223-24 . We thus also confirmed the Schroeder totality of the circumstances analysis for clauses excluding (or limiting) *440 liability for consequential damages in commercial transactions for services where there is insufficient evidence of unfair surprise. Id. at 222-23
The words that state the rule
Nearly 40 separately listed items handwritten in pen and ink on the same order form described and priced the items of extra optional equipment to be added to the car, these running from a vanity mirror at $1.45 to air conditioning at $430.40, with such in-between devices as power brakes, $43; wind deflector, $26.90; power seat, $96.84; tilt steering, $43.04.
The words that state the rule
Reversed and remanded to the trial court to try the issue of damages, i.e., to ascertain and grant the plaintiff judgment for the difference between the price paid and its fair market value in its delivered condition.
- case146 Wash. 2d 428Puget Sound Financial, L.L.C. v. Unisearch, Inc.Wash.decided 2002read it at the source ↗
The words that state the rule
We thus hold, as a matter of law, that the totality of the circumstances support the conscionability and enforceability of the liability limitation clause in the contract for services between Factors and Unisearch. We reverse the Court of Appeals decision and affirm the trial court’s grant of summary judgment limiting Unisearch’s liability, if any, to the amount of the fee charged for its service.
The words that state the rule
Accordingly, we are of the view that the trial court was in error in concluding that this sale fell within that provision of the Uniform Sales Act (RCW 63.04.160) which states that there is no warranty of fitness in the sale of a specified article under its patent or other trade name.
The words that state the rule
Neill, J. (concurring) — I concur in the result but have not signed the majority opinion as I believe it is inappropriate to commingle considerations regarding the application of the parol evidence rule to implied warranties of *197 contract with considerations pertaining to the strict tort liability of a manufacturer. Further, the conclusion that waivers are ineffectual “unless explicitly negotiated between buyer and seller and set forth with particularity showing the particular qualities and characteristics of fitness which are being waived” is too restrictive. A rule which requires proof by a preponderance of the evidence that the purchaser was specifically made aware that he was waiving warranties is sufficient to protect the buyer from surprise without unduly restricting freedom of contract. This also comports with the current statutory law of sales. RCW 62A.2-202; RCW 62A.2-316. See Broude, The Consumer and the Parol Evidence Rule: Section 2-202 of the Uniform Commercial Code, 5 Duke L.J. 881 (1970). Stafford and McGovern, JJ., concur with Neill, J.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.