a. Accepted motion to delete requirement of conspicuousness for non-mass market disclaimers.

b. Rejected a motion to delete conspicuousness for mass market contracts.

c. Rejected a motion to delete former (b)(5) by a vote of 3 - 6.

e. Deleted the reference to use of trade in former (b)(5). Vote: 8 - 2.

j. Voted 7-6 to use mass market, rather than consumer in this section. (Feb. 1997).

1. General Structure and Policy. This Section brings together various rules relating to the disclaimer of warranties. As in current Article 2, disclaimer of the warranties relating to infringement is not in this Section, but is contained in Section 2B-401.

The general approach corresponds to existing Article 2 and Article 2A. U.S. law recognizes that parties may disclaim or limit implied warranties. This reflects that implied warranties are default, rather than mandatory or immutable rules. Disclaimer and limitation is integral to the contract choice paradigm under which commerce occurs and to the ability of a party to choose the terms under which it markets information and the risk it elects to undertake.

This Section does not alter consumer protection laws and regulations. See Section 2B-104.

2. Express Warranties. Subsection (a) restates current Article 2 law, bringing that law to bear on other transactions covered by this Article, but not within the U.C.C. under existing Article 2. It uses modern language of "disclaimer" and "modification", rather than current Article 2 language, without substantive change.

3. Disclaimer of Implied Warranties: General Rules. Subsection (b) brings together various provisions on disclaimer of implied warranties. It differentiates between mass-market and non-mass-market cases. Specific treatment of mass-market licenses is in subsection (b)(4).

a. Record Required. Article 2B changes existing law and, except for cases noted in subsection (c) and (d), requires that a disclaimer of an implied warranty be in a record. This increases the likelihood that the disclaimer will be brought to the other party's attention and provides a form of statute of frauds requirement against fraudulent claims that a disclaimer occurred.

b. Conspicuousness. Except for mass-market licenses, Article 2B does not require that a disclaimer be conspicuous. Outside the mass market, this requirement is often superfluous and provides a trap for persons drafting contracts who are found later to have failed to meet applicable standards that the language be conspicuous. Article 2 in current law requires a conspicuous disclaimer only if the disclaimer is in writing.

c. Merchantability and Accuracy Warranties. Subsection (b)(2) follows current law and provides language that suffices to disclaim the merchantability, quality and accuracy warranties. Importantly, as in existing Article 2, the specified language is not mandatory. This language works, but other language also works if it reasonably achieves the purpose of indicating that the pertinent warranty is are not given in the particular case.

d. Fitness Warranty. Subsection (b)(3) follows current law and provides language adequate to disclaim the warranty under Section 2B-405. The language used in this Article is more explicit than that authorized under Article 2. As in existing Article 2, the specified language is not mandatory. This language works, but other language may also work if it reasonably achieves the purpose; that purpose is to indicate that the pertinent warranty is not given in the particular case.

e. Article 2 and 2A Disclaimers. Subsection (b)(5) provides for cross-article validity of disclaimer language. The intent is to avoid parties having to make a priori determinations about the extent of Article 2B or Article 2 coverage. In effect, language adequate to disclaim a warranty under the one article is adequate to disclaim the equivalent warranty under the other.

4. Mass-Market Disclaimers. Subsection (b)(4) provides that a disclaimer in a mass market environment must be conspicuous and in a record. This retains existing law under Article 2 and creates a new protection for transactions not previously governed by Article 2.

5. "As is" and General Disclaimers. Subsection (c)(1) deals with the effect of language or circumstances indicating that the information product is provided on an "as is" basis. It follows existing Article 2 language, providing parties with a means of conducting business without giving assurances of quality. The "as is" language need not be in a record. It is not effective with respect to the infringement warranty unless the circumstances or language satisfy the standard stated in Section 2B-401.

Subsection (c)(2) deals with where the intent is to disclaim all warranties in a single sentence. The subsection sets out a common language disclaimer based on proposals by the software industry as a means of giving more disclosure to the consumer of what is disclaimed. Importantly, as in existing Article 2, the specified language is not mandatory. This language works, but other language also works if it reasonably achieves the purpose of indicating that the warranties are not given in the particular case.

6. Excluding Warranties by Inspection or General Circumstances. Subsection (d) and (e) are taken from Article 2 with modifications.

a. Inspection and Disclosure. As in Article 2, an information provider is not responsible for defects that were either 1) known by or disclosed to the other party, or 2) could have been discovered on reasonable inspection if the opportunity to inspect was available. On the inspection issue, the language of this exclusionary principle was modified from existing Article 2 to reflect realities of inspection in complex computer program systems and to make clear that the inspection opportunity must be before the contract is formed since it relates to the existence or non-existence of warranties in that contract.

b. Course of Dealing, etc. Subsection (e) is taken from existing Article 2.