Corporate & Securities Law

AdamsDrafting Reader Challenge: What, If Anything, Does ?Residual Warranties? Mean?

By Ken Adams

David Munn, general counsel of contracts intelligence company Pramata Corporation and longtime friend of this blog, recently alerted me to some mystery contract language. Here’s the text of a question he posted on a couple of online forums of the Association for Corporate Counsel, to no avail:

I’m reviewing some proposed website terms of use and came across the following phrase in a warranty disclaimer: “neither _______ nor any third party or data or content provider makes any representations or warranties, whether express, implied in law or residual, as to the …”

I’ve never seen a reference to “residual” in this context before, and I have no idea what it refers to. I did a Google search for the phrase “implied in law or residual” and came up with 103,000 hits, almost all of which appear to be from various website terms of use.

Apparently either I completely missed learning about this warranty concept or there are a lot of people just copying the same website terms.

Can anyone tell me what this phrase means and why so many people are putting it into their website terms? And if this is a type of warranty I should try to disclaim, is there a way to express the concept in words that a normal reader would understand?

Because an ACC member in Belgium attempted to reply but was thwarted by a technical problem, David suspects that this language means something in Europe.

The notion of residual warranties has me stumped, even after some rooting around on Westlaw and Lexis.

I’d like to think that if there’s one place on the intertoobz to get your contract-language questions answered, it’s on this blog, with its cadre of single-minded readers. So readers, it’s up to you …

Full post as published by AdamsDrafting on April 15, 2010 (boomark / email).