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Understanding Implied Warranties For Businesses in Illinois

Purchasers of certain products in Illinois are protected through the existence of various implied warranties. An implied warranty is essentially a guarantee that the item sold is merchantable and fit for the purpose intended. Due to the existence of implied warranties, if a purchased product does not meet certain standards, the seller can be held liable. Implied warranties function to ensure that products are of adequate quality, and they protect the foreseeable expectations of the buyer.
 
However, under Illinois law, a seller is able to exclude or modify implied warranties if certain requirements are met. The term “as is” or other similar language which clearly states there are no implied warranties and clearly calls this to the buyer’s attention excludes all implied warranties. This language informs buyers that they are purchasing the goods in their present condition, with whatever faults they may possess.
 
If a waiver is valid, it takes away rights a buyer would otherwise possess. As a result, Illinois courts have held that disclaimers of implied warranties are not favored and must meet certain requirements to be valid. Most importantly, for “as is” language to constitute an effective waiver, the language must be conspicuous.  Courts determine whether a waiver is conspicuous by asking if a reader’s attention can reasonably be expected to be called to the term or clause based upon the specific circumstances.  A waiver is not conspicuous if it is only in slight contrast with the rest of the instrument.
 
For example, an Illinois court ruled a disclaimer was valid where it the disclaimer entitled “Warranties” was (1) present in a separate section of an agreement with a boldface heading larger than the other headings, (2) the disclaimer language was in capital letters where no other language in the agreement was in capital letters, and (3) the purchaser was an experienced business person. In another case, a court found a disclaimer was valid where it was printed in all capital letters, was set off in a separate text box that was surrounded by a border or shaded, was included for a second time in the center of a corresponding invoice, and was set off by an open space.
 
Additionally, under Illinois law, an individual’s oral statement that repairs were made does not create any warranty, nor does any such statement invalidate a waiver of warranties established by the existence of written “as is” language.  But in contrast to an oral statement, a seller’s specific, written representation about the condition of the product creates a duty that is not negated by the inclusion of “as is” language in the contract. 
 
In addition to waiver through the use of “as is” language, other situations can exclude warranties. For example, if a buyer examines goods, or is offered the chance to examine the goods and refuses, there is no implied warranty for any defects which would have been discovered upon examination. Furthermore, implied warranties may be modified or excluded through the course of dealings or performance.  Finally, in Illinois the implied warranties of merchantability and fitness for a particular purpose do not apply to the sale of certain livestock.
 
If you have any further questions about waivers in Illinois as they apply to your business, please contact the Business attorneys at Bozeman, Neighbour, Patton & Noe, LLP.