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 York, 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 and fitness for a particular purpose. However, such disclaimers must be conspicuous and specifically worded to be effective. For example, a disclaimer of the 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 and conspicuous as well. New York law requires that these disclaimers be presented in a clear and understandable manner to be valid. If a disclaimer does not meet these requirements, it may be deemed ineffective, and the implied warranties would stand. Additionally, certain consumer protection laws may limit the ability to disclaim warranties in consumer transactions, ensuring that consumers are not misled about the quality or suitability of goods.