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

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 …

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

6 thoughts on “AdamsDrafting Reader Challenge: What, If Anything, Does “Residual Warranties” Mean?”

  1. I have no idea how it's related to a website's terms of use, but I know that some products can carry a "residual warranty" that offers a warranty-like remedy that essentially accounts for the depreciated value of the product nearing the end of some term. Cars are a good example. Some high-end tools and cookware have residual warranties that account for the "age" of the product.

  2. 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.

  3. Since no one seems to have come up with a good explanation of what the word "residual" means in the context of the warranty disclaimer wording "whether express, implied in law or residual," I think it's reasonable to assume that the first person who drafted this wording may have actually had a reason for it (perhaps, as Mike and Mark point out, it had something to do with the remaining portion of a manufacturer's warranty), but that it has no meaning in the context of general web site terms of use.

    I checked the sites of a number of well-known companies and none of them used this "residual" wording in their terms of use. The warranty disclaimers on these sites generally refer to "express, implied, or statutory" warranties, which makes more sense.

    The explanation for why tens of thousands of web sites have this wording in their terms of use may simply be the same explantion for why archaic and nonsense language persists in contracts–it was copied over and over again by people who either didn't read the language or just assumed that it had some meaning and went ahead and used it without understanding it.

  4. 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 ", 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.


    Marty Carrara

  5. 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.

  6. 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.


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