Disclaimers in contracts are generally included when one party wants to sell a product or service without any guarantee of its quality (merchantability) or suitability for the buyer’s intended use. Guarantees of a product’s quality or suitability are also known as warranties, and may be implied in the parties’ agreement without being written or spoken—usually by virtue of a state’s statutes adopting the Uniform Commercial Code’s provisions governing the sale of goods (Article 2)—or by court opinions (also known as common law or case law). Some states have laws (statutes) that prohibit the disclaimer of warranties; make disclaimers ineffective; and penalize parties who attempt to disclaim such warranties. Disclaimers in contracts also serve as an explicit warning to the parties of the risks in a sale or transaction and help avoid a subsequent claim that a party was unaware of such risks or was deceived regarding the presence of such risks.

In Colorado, disclaimers in contracts are subject to both the Uniform Commercial Code (UCC) as adopted by the state and relevant case law. Under the UCC, specifically Article 2 which governs the sale of goods, sellers can disclaim implied warranties of merchantability or fitness for a particular purpose, but such disclaimers must be conspicuous and specific. For example, to disclaim the warranty of merchantability, the language must mention 'merchantability' and in the case of a written disclaimer, it must be conspicuous. To disclaim the warranty of fitness, the disclaimer must be in writing and be conspicuous. Colorado statutes do not categorically prohibit the disclaimer of warranties, but they do require that disclaimers meet certain standards to be effective. Additionally, Colorado's Consumer Protection Act may impact the enforceability of disclaimers in certain consumer transactions, as it prohibits deceptive trade practices. It's important for parties in Colorado to understand that while disclaimers can limit liability for certain risks, they must be crafted in accordance with state law to be enforceable and cannot be used to protect against gross negligence or intentional harm.