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:
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 …
6 thoughts on “AdamsDrafting Reader Challenge: What, If Anything, Does “Residual Warranties” Mean?”
Ken, I have never heard of the term either. I did a quick Google and found a range of meanings, including the one identified by Mike, above. One common theme seemed to relate to an express manufacturer's warranty, eg repair or replace the item within 12 months, where the residual warranty seemed to be any rights against the manufacturer after the express warranty had expired. Another theme seemed to be the rights that a subsequent purchaser of the item had against the manufacturer.
Unless someone comes up with a more concrete explanation, I am not inclined to start using the term.
Ken and all,
I did the same quick Google search, and found pretty much the same info. I came across an article on calculatuing "residual value warranties" at "http://www.rotman.utoronto.ca/facbios/file/rvw_1.pdf, which presents a method for putting a price on what Mark described above. My view is that this is not standard disclaimer language as prescribed by UCC and other applicable law, and I am inclined to agree with David's conclusion. It also seems to me that a "residual warranty" as it has been described will not arise unless the agreement provides for it (at least in the US) and, therefore, it would be an express warranty if it is a warranty at all (it would more likely be just another covenant). That being the case, the disclaimer does not make sense: if a residual warranty is described in the agreement, the disclaimer will not operate against it, and if it is not in the agreement, either the express warranty disclaimer is operative or there is nothing at all to disclaim.
In the French contract I’m translating, a ‘residual warranty’ is an additional period added to the end of the original warranty if, during the original warranty period, the goods had to be repaired. The residual warranty period is equal to the time it took to repair the faulty goods. Hope this helps.
Just wondering if this is not somehow related to information/content that has been removed from the website and stored as a so-called ‘residual copy’. In other words, this might be an attempt to expressly include any removed content in the scope of the disclaimer.