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 New Jersey, disclaimers in contracts are subject to both the Uniform Commercial Code (UCC) as adopted by the state and relevant case law. Under the New Jersey version of the UCC, particularly Article 2 which governs the sale of goods, warranties can be either express or implied. Implied warranties include the warranty of merchantability and the warranty of fitness for a particular purpose. Sellers can disclaim these implied warranties, but the disclaimers must be conspicuous, written in a clear and specific manner, and meet certain legal standards to be valid. For example, to disclaim the warranty of merchantability, the language must mention 'merchantability' and in case of a written disclaimer, it must be conspicuous. Disclaimers that attempt to limit or exclude consequential damages for breach of warranty must also be conspicuously written. New Jersey courts will evaluate disclaimers for their fairness and clarity. If a disclaimer is deemed unconscionable or not clearly communicated to the buyer, it may be rendered ineffective. It is important for parties in New Jersey to understand the specific requirements for contract disclaimers to ensure they are enforceable and to avoid penalties for attempting to disclaim warranties in a manner that violates the law.