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 Indiana, as in many states, the regulation of disclaimers in contracts is influenced by the Uniform Commercial Code (UCC), which Indiana has adopted. Under the UCC, particularly Article 2 which governs the sale of goods, warranties can be either express or implied. Express warranties are affirmations of fact or promises explicitly made by the seller, while implied warranties arise by operation of law, such as the implied warranty of merchantability or fitness for a particular purpose. Indiana allows sellers to disclaim or modify these implied warranties, but the disclaimers must be conspicuous and specific. For example, the disclaimer of the warranty of merchantability must mention the word 'merchantability' and, in the case of a written disclaimer, it must be in writing and generally must be conspicuous. Disclaimers of the warranty of fitness for a particular purpose must also be in writing and conspicuous. Indiana law requires that any attempt to disclaim or limit warranties must be done in a clear and upfront manner to be effective. If a disclaimer does not meet these requirements, it may be deemed ineffective, and the seller could be held liable for breach of warranty. Additionally, certain consumer protection laws may limit the ability to disclaim warranties in consumer transactions.