How Disclaimers in a Contract Can Defeat a Breach of Implied Warranty Claim Under NY Law
I was recently confronted with an interesting question: an old acquaintance of mine paid for an exclusive license to market and sell a certain technology that was patented. There was one "small" problem, however: the technology didn't work. So, you would think that my acquaintance should have no problem recovering his downpayment for the exclusive license fee under New York law as a breach of implied warranty, right? Well, not so fast. Under Uniform Commercial Code section 2-316, there are circumstances where a vendor can validly disclaim either a warranty that the goods are fit for a particular purpose, or are even fit at all. One of the most common examples of this is where the buyer purchases the goods "as is." The moral of the story is obvious: you should not sign such an agreement unless, and at a bare minimum (and I don't recommend this), you have first assured that the product actually works.
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