What is the purpose of including disclaimers of implied warranties in the equipment sale or lease agreement?

• A. To Disclaim Implied Warranties
• B. To Create Express Warranties
• C. To Waive All Payment Rights
• D. To Shift Risk to the Lessee

Answer: (A)

Disclaimers of implied warranties exist to negate the warranties the law would otherwise read into a sale or lease of equipment. By stating the equipment is sold or leased “as is” or with all faults, the contract makes clear that there are no implied guarantees about merchantability or fitness for a particular purpose beyond what is expressly promised in writing. This limits the seller’s or lessor’s liability for defects or performance issues that aren’t specifically guaranteed, helping allocate risk to the buyer or lessee in a way that reflects the negotiated terms. It’s not about creating express warranties, and it’s not primarily about waiving payment rights; rather, it’s a traditional tool to control exposure to implied promises, subject to what law allows.