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 Vermont, as in many states, the regulation of disclaimers in contracts is influenced by the Uniform Commercial Code (UCC), which Vermont 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 warranty of merchantability or the warranty of fitness for a particular purpose. Vermont allows for the disclaimer or modification of warranties under certain conditions. However, such disclaimers must be presented in a clear and conspicuous manner. For example, to disclaim the implied warranty of merchantability, the language must mention 'merchantability' and in case of a written disclaimer, it must be conspicuous. To disclaim the implied warranty of fitness, the disclaimer must be in writing and conspicuous. Vermont 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. Additionally, Vermont's Consumer Fraud Act provides protections against unfair or deceptive acts or practices in commerce, which could impact the enforceability of certain disclaimers. It is important for parties in Vermont to understand these regulations when drafting disclaimers in contracts to ensure they are compliant with state law and to avoid potential penalties.