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 Iowa, as in many states, the regulation of disclaimers in contracts is influenced by the Uniform Commercial Code (UCC), specifically Article 2, which Iowa has adopted. This article governs the sale of goods and allows for the disclaimer of both express and implied warranties, including the warranty of merchantability and the warranty of fitness for a particular purpose. However, such disclaimers must be presented in a clear and conspicuous manner to be valid. For example, a disclaimer of the implied warranty of merchantability must mention the word 'merchantability' and, in the case of a written disclaimer, it must be conspicuous. Disclaimers of the warranty of fitness for a particular purpose must be in writing. Iowa law also requires that any disclaimer of implied warranties be fair and reasonable. If a disclaimer does not meet these requirements, it may be deemed ineffective, and the seller could be held liable for breach of warranty. It is important for parties in Iowa to understand these regulations when drafting contracts to ensure that any disclaimers are legally enforceable and do not violate state law.